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Once a lithium darling, Sigma’s woes mount with 29% stock rout
Sigma Lithium Corp. is plunging amid growing doubts about near-term production and potential delays to a key expansion project.
In a sharp reversal for a stock once seen as an industry darling, Sigma has lost almost one-third of its market value this week for the worst two-day slump in 21 months. On Tuesday, the stock was down more than 7%, making it one of the worst performers in an index of lithium producers.
Late Monday, BMO Capital Markets joined a growing chorus of analysts tempering outlooks after Sigma abruptly changed mining contractors last month as part of measures the company said were aimed at improving efficiency at its flagship Brazilian mine.
Plans to begin using larger trucks and modernize some gear may inflate capital-spending requirements and slow an expansion project, analysts said.
“We’re not sure of the exact reason for recent volatility in the stock but know there are many questions around the change in mining contractor, the balance sheet, etc., causing SGML to underperform this lithium rally,” BMO analyst Joel Jackson wrote in a note to clients.
Bank of America has been ringing alarm bells as far back as August, highlighting the potential implications of increasing delays in payments to vendors. Late last month, the bank downgraded Sigma shares from buy to neutral.
Sigma is grappling with weaker prices for the battery metal and heightened investor scrutiny. The company didn’t immediately respond to a request for comments.
Sigma shares are down more than 50% this year after losing 64% of their value in 2024.
The global lithium market has been in turmoil amid slower-than-expected growth in electric-vehicle demand that’s been compounded by US President Donald Trump’s revamp of clean-energy policies in the world’s largest economy.
Sigma is scheduled to release third-quarter results on Nov. 14.
(By Mariana Durao, Vinícius Andrade and Annie Lee)
California lithium company eyes 2026 IPO to attract US government investment
A California lithium company plans to launch an initial public offering next year as part of a bid to become an attractive investment target for the US federal government.
Controlled Thermal Resources (CTR), which has been privately held for more than a decade, aims by next July to spin off its minerals assets and part of its geothermal power generation business into a publicly traded firm to be called American Critical Resources.
The company, which must first commercialize so-far unproven direct lithium extraction technology (DLE) to produce the electric vehicle battery metal for Stellantis and General Motors, is deciding between Intercontinental Exchange’s NYSE or Nasdaq for the listing, said CEO Rod Colwell.
US government investments
The IPO plans come amidst Washington’s growing wave of investments into publicly traded minerals projects, including rare earths producer MP Materials and Lithium Americas, part of President Donald Trump’s goal off lessening the country’s reliance on market leader China.
“Would the federal government do what they’ve done with MP Materials if it was private?” said Colwell. “There seems to be a pattern that’s been formed in Washington for a desire to work with public companies versus private companies and have a path to liquidity.”
When asked if the IPO was aimed at trying to secure US government funds, Colwell said: “Absolutely.”
Colwell, who will become the CEO of American Critical Resources, controls the majority of CTR’s private shares along with family members. He declined to provide a valuation estimate for the new company, adding that conversations are in early stages.
Struggles to commercialize DLE
The company – like its peers – has struggled for years to commercialize direct lithium extraction technology (DLE), a process backers say is more sustainable than open-pit mines and evaporation ponds, the two most common methods to produce lithium.
It missed a self-imposed deadline to supply GM by 2024.
The project, based at the Salton Sea, roughly 160 miles (258 km) southeast of Los Angeles, which is slated to produce lithium starting in 2028, was added to a fast-track permitting list by the Trump administration.
In addition to lithium, the new company aims by 2029 to produce zinc, manganese and potash from brine extracted from deep reservoirs, which teems with myriad critical minerals.
Australian advisory firm Hall Chadwick and investment bank Cohen & Co are advising on the IPO process.
The Salton Sea project faced a lawsuit from environmental group Earthworks due to concerns about water use. A state court ruled earlier this year against the environmental group, which is appealing.
This latest California lithium push comes amid increasing competition to be the first in the US to deploy DLE. Arkansas, for example, is vying to beat California to that mark.
(By Ernest Scheyder; Editing by Conor Humphries)
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