March 19 (Reuters) - Sigma Lithium ( SGML ) said on

Tuesday its unit received an initiation letter of arbitration

from South Korean company LG Energy Solution.

In its request for arbitration, LG Energy alleges that Sigma

Lithium ( SGML ) is in breach of certain provisions in connection to a

lithium supply agreement entered in 2021.

"The claims are completely without merit and intends to

defend its interests vigorously," Sigma

said

in a statement.

U.S.-listed shares of Sigma were down 1.6% at $12.35 in

extended trade.

In 2021, Sigma and LG Energy had entered into a six-year

offtake agreement for battery grade sustainable lithium

concentrate scales from 60,000 tons per year in 2023 to 100,000

tons per year from 2024 to 2027.