By Gabriel Chiappini
19/05/2026

Brazil Iron plans to transform an iron ore deposit in the south-central region of Bahia into a decarbonized iron production platform aimed at the international market, betting on natural gas as a pathway to reducing emissions.

The plan is to use natural gas in the project’s first phase, targeting an initial reduction of more than 70% in emissions compared to traditional coal-based steelmaking routes. The remaining emissions could be captured or offset.

The project, with operations expected to begin in 2030 or 2031, estimates investments of US$ 5.7 billion and aims to produce HBI (Hot Briquetted Iron), an intermediate input between iron ore and steel that is considered strategic for the new era of the steel industry.

According to Emerson Souza, Vice President of Institutional Relations at the London-based company, mining represents only a small portion of the venture.

“Today, it is an HBI production project,” the executive said in an interview with Agência eixos.

According to him, between 10% and 20% of the Capex is directly related to mining activity itself.

“The rest is steelmaking and logistics,” he explains.

The company says it has already certified 1.7 billion tons of high-purity iron ore in Bahia, with potential for reserve expansion in the municipalities of Piatã, Abaíra, and Jussiape.

According to Souza, the distinguishing feature of the asset lies in the quality of the ore, its low contaminant content, and its malleability — characteristics considered essential for HBI production.

“We discovered that we were sitting on top of a material that was not simply a mining opportunity, but an opportunity to transform the global steelmaking chain,” he says.

Natural Gas Now, Hydrogen Later

“The plan for the first phase is natural gas, thinking about something we already have available,” says Souza.

The company is also monitoring the possibility of using biomethane in the region, which could further increase the decarbonization of the final product.

Green hydrogen, meanwhile, is viewed as a future bet, dependent on the technological and economic evolution of the market.

“We have a green hydrogen plan, it is included in our strategy, but it is still an unknown,” he says.

According to the executive, the company is working with a four- to five-year horizon before operations begin and believes the technological landscape could change significantly within that period.

“If nothing changes, the first phase will use natural gas, which will already guarantee us a reduction of more than 70% in emissions,” he says.

To neutralize the remaining emissions, the company is evaluating alternatives such as carbon capture and storage (CCS), in addition to the purchase of carbon credits.

“Our goal is for the product to already leave the plant 100% green,” says Souza.

Even so, green hydrogen remains on the company’s radar.

“If hydrogen takes off economically, we will absolutely be a player in that market. We will have a plant in the same area dedicated to the production of green hydrogen.”

Foreign Market Drives the Project

The company’s commercial focus is on international markets, especially Europe and Asia, where regulatory pressure for steel industry decarbonization is increasing.

According to Souza, green HBI produced in Bahia could reach prices significantly higher than traditional iron ore.

“Today, it already has a market value of around US$350 per ton,” he says.

The company is betting on the combination of advancing international climate policies and the expected global supply deficit of decarbonized steelmaking inputs to sustain future demand.

Photo: Disclosure

Source: Brazil Iron wants to produce “green iron” using natural gas in Bahia