To Rafael Vazquez, Valor — São Paulo
22/04/2026

As global powers reshape their supply chains under the pressure of wars and challenges linked to the climate crisis, Brazil has the opportunity to emerge on the international stage as a key player in the industrial decarbonization landscape, according to the British geologist and technical director of Brazil Iron, a UK-based company that maintains a subsidiary in Piatã, a city in the state of Bahia located in the Chapada Diamantina region, rich in iron ore and manganese.

The company occupies an area of 430 km² in the state of Bahia and is awaiting environmental licenses to operate fully, but it already plans to invest US$5.7 billion over the next five years to tap into the potential of “green iron,” a term used to refer to the production of iron and steel through a low-carbon emission process.

In an interview with Valor, the British geologist stated that the steel industry is currently undergoing a “bifurcation.” According to him, on one side is low-quality ore, dependent on fossil fuels, which has been losing added value due to mechanisms such as the European Union’s Carbon Border Adjustment Mechanism (CBAM)—a regulation that taxes imports of products such as steel, aluminum, and cement based on their carbon emissions. In this context, Brazil has natural advantages that need to be leveraged, he says. One of the main ones is the ability to provide clean energy for the steel production process.

“The world needs iron to decarbonize, and there’s no escaping the fact that Brazil has what the world needs. Brazil is where clean energy is available,” says the Brazil Iron geologist.

Davies explains that Brazil’s capacity to generate clean energy—especially in the Northeast—is essential to power so-called electric arc furnaces (EAF), which are key to replacing coal-fired blast furnaces in steel production.

The iron industry accounts for approximately 8% of global carbon emissions. Within the steel industry, this share is about 25%. Therefore, it is an issue that everyone will have to deal with, and those operating in Brazil will have an advantage on the path to decarbonization,” he assesses.

Davies sees the combination of Brazil’s critical mineral reserves and its supply of clean energy as a major strategic advantage for the country in the 21st century. The challenge lies in reducing obstacles to attract companies interested in operating in a more long-term, sustainable way, rather than merely following an extractive model. “The ideal approach is to develop strategies to sell not only to China, which is the main buyer, but also to countries such as the United States and Japan. That’s what we aim to do with green iron from our production in Bahia. This will help drive local development in the region,” he says.

Regarding the external scenario, with countries increasing spending on armaments and wars—which naturally tends to reduce public funding for decarbonization—Davies notes that this same issue highlights the need to look toward alternative energy sources. “The current war [in Iran] is precisely creating an energy crisis because of oil,” he says. “So, decarbonization remains an opportunity in energy terms. The pace of the transition may slow down, but the movement will not stop.”

Photo: Divulgação

Source: Brasil possui vantagens estratégicas para produzir e exportar ‘ferro verde’, diz geólogo britânico | Brasil | Valor Econômico