Sigma Lithium Corporation (NASDAQ: SGML) said a Court of Appeal Judge in the Court of Justice of Minas Gerais state overturned a lower court decision that included the potential for a legal collateral of $10 million.

The state court ruling was based on environmental data presented by Sigma Lithium covering one year of monitoring by third parties. The data measured dust, vibrations and noise levels in four neighboring communities around the company's operations.

According to the company's defense materials, dust measurements showed Sigma Lithium operates 560% better than recommended standards for total suspended particles and 350% better for particles below 2.5 micrometers. The company said 95 measurement campaigns for noise levels demonstrated compliance with Brazilian standards, while vibration measurements registered extremely low levels on seismograph scales.

The Court of Justice requested that Sigma Lithium fund an independent technical advisory firm to monitor the impacts of the company's operations on residents in the municipalities of Araçuaí and Itinga. The company said it welcomed the requirement for an impact assessment study.

Sigma Lithium describes itself as the largest producer of lithium oxide concentrate in the Americas, operating the Grota do Cirilo site in Brazil. The company currently has nameplate capacity to produce 270,000 tonnes of lithium oxide concentrate annually and has initiated a Phase 2 expansion designed to increase production capacity to 520,000 tonnes.

The information was disclosed in a company press release.