In 2008 it was reported by ABRAF that expansion within the Brazilian iron and steel industry was expected to continue. Investments in new industrial plants and the expansion of existing plants was increasing, with the current annual steel production capacity of 33 million tons forecast to increase to 57 million tons over the next ten years. The National Development Bank (BNDES) predicted investments of about R$ 32 billion from 2008 to 2011 in the iron and steel sector.

Charcoal-based pig-iron production had remained stable for a number of years prior to 2008, whilst in 2008 approximately 50% of charcoal-based pig-iron ovens were inactive due to an under supply of charcoal.

In 2008 approximately 1/3 of the Brazilian pig-iron production (32.5 million tons in 2006) was based on charcoal, for use as a thermal reductor. The charcoal used within the industry at the time was reported as coming from both forest plantations and from natural forests’ residues (estimated at 50/50 in 2006). However, due to the increasing social and environmental pressures against the utilization of wood from natural forest, chiefly initiatives from the public and the private sectors began aiming at substituting wood consumption from natural forests in favor of forest plantations for charcoal production.

Two initiatives were announced. First, the State Government of Minas Gerais in a public-private partnership aimed to stimulate and search for new financing sources to boost forest plantations in the state, from 1.2 to 1.8 million hectares over an 8 year period, representing a 50% growth. This was expected to provide an answer to the charcoal shortage problem from planted forest and to the needed preservation of the remaining natural forests.

The newly-established Sectoral Chamber for Silviculture, under the direction of the State Secretary of Agriculture, Livestock and Supply of Minas Gerais (SEAPA-MG), had discussed this urgent initiative internally and with the civil society. Secondly, a private initiative by mining and iron/steel companies of the Northern states, Pará and Maranhão, relies on investing and promoting large-scale forest planting in the Carajás mining cluster. This initiative has been led by Vale company through the so-called “Vale Florestar Amazonia” project with a budget of USD 200 million up to 2010. It aimed to promote the plantation of 150,000 hectares of eucalyptus forests on degraded land in the region and to recover 50,000 hectares of natural forests.

GWD Forestry, Greenwood Management, Pig iron, eucalyptus, exports, brazil


In 2009, Brazil announced at the Cop15 summit in Copenhagen it would look to reduce its emissions by replacing coking coal used in the production of pig iron with charcoal sourced from “exotic species” (eucalyptus), this initiative was expected to increase demand for charcoal within the Brazilian pig iron industry by up to 50%.

However a series of events, notably cheaper pig iron produced by Russia, the reduction in those prices paid for pig iron in China, and rising inflation rates in Brazil subsequently led to the wide scale closure of pig iron facilities across Brazil starting in 2012.

GWD Forestry has summarised the events that have affected the pig iron industry below, that has since led to the wide scale closure of the industry in Brazil.


• In 2008 16 pig iron companies were operating in the North Brazilian pig iron stronghold of Carajas alone.

• Ferrobahia announced the development of the first pig iron production facility to be established within the state of Bahia and located in the city of Jequie.

• In 2009 shipments to the US were 1.26 million metric tonnes.

• December 4th 2009: Brazil announces new measures aimed at removing coking coal from the Brazilian pig iron industry, and replacing it with charcoal from reforestation projects established with exotic species (i.e. eucalyptus).

• In 2012 Cargill the world’s largest pig iron trader, announced it was closing its pig iron business.

• In 2012 the north Brazilian pig iron company Cosipar seen widely as a pioneer in the industry permanently closed its doors after 26 years in business.

• By 2013 out of the 16 pig iron producers located in Carajas, only five remained these were Sidepar in the state of Para, and Viena Sidergica, Queiroz Galvao, Gusa Nordeste and Margusa in Maranhao.

• China reduced its price paid for pig iron to approximately $200.00 per metric tonne whilst currently in Brazil production costs rose to $300.00 per metric tonne.

• 2016 currently only a handful of pig iron producers exist in Brazil. Most producers have now shut their doors or are operating on a reduced basis. These turn of events have reduced the price per cubic meter of charcoal substantially due to a decreased demand for eucalyptus charcoal, and increased supply.

Sources: brazil’s_pig_iron_struggles.pdf  /  /