GREEN IRON IN CHAPADA DIAMANTINA

By ITM Editorial

Project foresees low-carbon production, the creation of up to 53,000 jobs, and Brazil’s global prominence in the energy transition

The Ferro Verde project, developed by Brazil Iron, is underway in Chapada Diamantina (BA) and promises to transform the mining and steelmaking landscape in Brazil and worldwide. With an estimated investment of US$ 5.7 billion, the venture is moving toward the production of Hot Briquetted Iron (HBI) with extremely low carbon emissions, known as green iron. The proposal is to produce raw material suitable for the global transition from traditional and highly polluting coal-based blast furnaces to Electric Arc Furnaces (EAFs), which can operate with low- or zero-emission energy.

The company has already invested more than R$ 1.7 billion in Bahia and is finalizing the Bankable Feasibility Study (BFS) of the project, with construction expected to begin at the end of 2026. Ferro Verde includes three open-pit mines—Conceição, Jussiape, and Mocó—and is centered in the municipalities of Piatã, Abaíra, and Jussiape in Bahia. It stands out with certified mineral resources of 1.7 Bt, along with innovative practices in logistics, sustainability, and environmental recovery.

According to Rob Davies, CTO of Brazil Iron, the initiative has strong support from international investors, financial institutions, and export credit agencies (ECAs), with the goal of positioning Brazil as a global leader in green iron production—a key resource for decarbonizing the steel value chain.

RESOURCES

With 433 km² of mining rights in Bahia, Brazil Iron holds one of the largest iron ore concessions granted to a foreign company in the country.
High-quality hematite formations are present in sequences ranging from the Archean to the Paleoproterozoic periods of Chapada Diamantina, extending across a belt of about 60 km, ensuring both scale and deposit continuity.

In addition to over 100 km of completed exploration drilling in the region, the project has already conducted metallurgical studies in three countries—Brazil, Germany, and the United Kingdom (UK). The results of these analyses, according to Davies, consistently demonstrate the project’s ability to produce a concentrate suitable for supporting subsequent pelletizing and HBI production operations through Direct Reduction (DR) technology. The integrated operation includes the mines, a 120 km railway branch line, a pelletizing plant, and an HBI facility at Porto Sul, on Bahia’s coast.

In June 2025, the company announced a 24% increase in mineral resources, certified under the Canadian NI 43-101 standard. Total resources now stand at 1.7 Bt, 24.08% above the previously verified 1.37 Bt.
The BFS is scheduled for completion in Q1 2026. The Mining Concession has already been approved by Brazil’s National Mining Agency (ANM), and the project is currently in the process of obtaining an Installation License (LI) from Inema (Bahia’s Institute for the Environment and Water Resources). Construction is set to begin at the end of 2026.

The US$ 5.7 billion financing will come from a combination of equity, debt, and ECA support, backed by institutions with assets exceeding US$ 10 trillion. Thus, says Davies, the company has no current plans for an IPO.

At present, the project employs about 240 people, including 133 direct jobs.
“At the peak of construction, the development of the mine, the logistics system, and the industrial units should create approximately 53,000 direct and indirect jobs,” estimates the CTO.

BENEFICIATION

Ore processing will follow these steps:

• Primary crushing to reduce the initial size of Run-of-Mine (ROM) ore
• Secondary crushing for further size reduction, preparing ore for grinding
• Grinding to liberate iron particles
• Pre-concentration through magnetic separation to remove significant gangue early in the process
• Regrinding to achieve the particle size needed for efficient flotation
• Flotation for final concentrate cleaning, removing impurities and producing high-grade iron ore

“This process route will yield pellet feed with 67.5% Fe and extremely low contaminant levels, making it ideal for Direct Reduced Iron (DRI) production,” assures Davies.

The mining operation will include a tailings filtration system, eliminating the need for dams. Material will be stored for later use in backfilling mined-out pits, mixed with waste rock. The planned 8 Mtpa of concentrate will be transported by rail to port facilities, where it will be pelletized and processed to generate HBI. According to Davies, the DRI will contain about 94% iron content.

A current logistical bottleneck is the completion of Section 1 of FIOL (West-East Integration Railway), which connects to Porto Sul. Construction on this section—concessioned to Bamin (Bahia Mineração), another iron ore producer in the state—has been halted, and work on Porto Sul itself is delayed.

Davies admits that FIOL Section 1 and Porto Sul are central to the Ferro Verde project’s planning, so alternative strategies are being evaluated with state and federal governments to establish a viable logistics framework.
“The state of Bahia offers several port options that could enable a world-class integrated mining and HBI production system, aligned with our commitment to sustainability, efficiency, and long-term value creation,” says the executive.

INNOVATION

Internal transport logistics appear well resolved. At the mine, an IPCC (In-Pit Crushing and Conveying) system will be implemented, crushing ore at the mining face and replacing diesel truck haulage with electric conveyor belts. Developed in partnership with German company RWE, this technology reduces direct (Scope 1) CO²-equivalent emissions and dust, while operating with clean energy.

For auxiliary equipment, Brazil Iron also plans to adopt an electric fleet, powered by batteries or hybrid diesel-electric equipment. The beneficiation process has been designed to operate entirely with renewable energy sources, leveraging Bahia’s potential in this area, supported by wind and solar projects already operating or under development near the mine and along the logistics corridor to the port.

In the future, Davies explains, the project will incorporate green hydrogen as a reducing agent, enabling zero-carbon iron production and supporting the complete decarbonization of the steel value chain.

SUSTAINABILITY

According to Rafael Genú, Brazil Iron’s Environmental, Land, and Community Relations Manager, the Ferro Verde project’s technologies and environmental and social programs reflect the company’s clear commitment to responsible regional development.

On the environmental side, he highlights dry stacking of tailings, dust emission control through mist sprayers, covered conveyor belts, polymers on access roads, and water management systems, including effluent and sewage treatment stations and water drainage and reuse processes for both mining and industrial operations.
“These practices not only help protect regional water resources but also ensure more rational use of water—a resource that is increasingly valuable, especially in Chapada Diamantina,” says the manager.

On the social front, the project foresees up to 53,000 direct and indirect jobs, including 5,000 for local residents during construction and operations. Detailed studies were conducted to avoid impacts on cultural heritage, schools, healthcare units, and, most importantly, to preserve caves classified as having maximum speleological relevance in the region.

Engineering decisions were guided by socio-environmental criteria, aimed at avoiding forced resettlements and protecting high ecological value areas, such as the Priority Conservation Areas of Chapada Diamantina.

According to Genú, the project aligns with a series of public policies and strategic government programs, including the National Mining Plan 2030, the “Light for All” program, and cultural support mechanisms such as the Paulo Gustavo and Aldir Blanc Laws.
“This institutional articulation seeks to maximize benefits for the local population and ensure that economic growth goes hand in hand with cultural appreciation, social inclusion, and environmental protection, in line with best ESG (Environmental, Social, and Governance) practices and the expectations of a market increasingly demanding in terms of sustainability,” concludes the manager.