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Key takeaways:
Guy Saxton, founder and president of metals and mining company Brazil Iron, is betting on green iron — and on Brazil — as a key part of that transition.
“We don’t want to just export iron ore — we think that is suboptimal. What we really want to do is add value to Brazilian natural resources,” Saxton told Fastmarkets in an exclusive interview.
According to the International Energy Agency (IEA), the steel industry accounts for around 2.8 billion tonnes of CO2 emissions per year, or 8% of total energy system emissions, largely due to its reliance on coal-based blast furnaces. While solutions such as scrap recycling and carbon capture have been explored, they either fall short of eliminating emissions entirely or come with high costs and scalability challenges.
Green iron — typically in the form of hot-briquetted iron (HBI) produced via direct-reduced iron (DRI) — is increasingly seen as a critical starting point for decarbonizing the steel value chain. By enabling the use of electric-arc furnaces (EAFs) instead of coal-based processes, green iron significantly reduces emissions and energy intensity.
Brazil Iron is positioning itself at the center of this shift. The company is developing a large-scale integrated project in the Brazilian state of Bahia, backed by more than $5.7 billion in planned investment, aiming to produce HBI from high-grade iron ore reserves exceeding 1.7 billion tonnes.
The company expects to begin operations by 2030, targeting an initial output of 5 million tonnes per year of HBI, with further expansion planned.
That said, McKinsey data indicates that CBAM regulations and Japanese subsidies could create a global HBI deficit of 109 million tpy by 2031.
Saxton’s answers to Fastmarkets’ questions are below:
Saxton: Over three phases, we aim to reach 15 million tonnes [of HBI] per year. In international terms, that would be the largest project of its type on the planet. I fully expect to be dead when people continue this project because it’s huge — not something you can do in one generation.
What we really want to do is add value to Brazilian natural resources, create upskilling opportunities, massive employment — 55,000 jobs in phase one alone — and generate significant tax revenue.
You can export iron ore plus abundant natural gas and, in the future, green hydrogen, which currently has an average price for five years, starting 2030 to 2035, of $578 [per tonne for HBI]. So why would you sell something for $120 [per tonne]?
Fastmarkets’ weekly price assessment for hot-briquetted iron, cfr Italian ports was $370-380 per tonne on Thursday April 2.Fastmarkets’ weekly price assessment for hot-briquetted iron, fob New Orleans was $421-446 per tonne on Monday March 30.And Fastmarkets’ fortnightly price assessment for hot-briquetted iron, cfr Asia was $370 per tonne on Friday March 27.
Need insights into the green steel market? Access Fastmarkets’ green steel and low carbon steel raw materials prices and transparent pricing methodologies. Speak to one of our experts to learn more.
Saxton: We had invested around $1.7 billion up to April 2025, and that figure has increased slightly since then, by $33 million. Total capital expenditure is approximately $5.7 billion.
The mining component itself is relatively small, around $350 million. The rest is spent on the shaft furnace, with Midrex [Technologies]. That’s probably where about 70% of the [capital expenditure] goes. The balance is allocated to logistics, including rail and port infrastructure.
Around 85% of the financing has already been soft-circled through export credit agencies in Europe and the US. The remaining amount we need to raise through debt and equity is completely manageable, and we are working very closely with several of the world’s leading project finance banks.
Saxton: The most important milestone is the environmental license. We submitted our application in October 2024 and expect approval in the coming months.
Once that is secured, the next steps involve completing the final engineering studies required by lenders and finalizing financing. Typically, capital deployment would follow within 18 to 24 months after licensing.
Saxton: Any human activity has an environmental impact. The real question is where you can reduce emissions most effectively, and iron and steel is a key sector to address.
On the mining side, we are implementing dry stacking, meaning there are no tailings dams. We also plan to rehabilitate mined areas progressively, with biodiversity outcomes expected to exceed current levels.
The larger impact comes from the energy used in production. Our long-term goal is to use green hydrogen, which could reduce emissions by up to 99%. In the short term, we will use natural gas combined with carbon capture and storage, which can reduce emissions by around 95%.
Saxton: There is significantly more demand than supply — that is the fundamental issue. According to industry estimates, there could be a shortfall of over 100 million tonnes per year. At the same time, more than 300 million tonnes of EAF capacity is planned globally.
The reality is that mining projects take a long time to develop, so supply cannot respond quickly enough. What is announced publicly is not always what materializes in practice.
Saxton: The real issue is the price. Steelmakers don’t want to pay more than $450-500 [per tonne of HBI].
If you look at the forecast, the average for 2030 to 2035 is $578 [per tonne], but they really only want to pay $100 less than that.
However, they will have to pay it because their customers — Mercedes-Benz, VW, BMW, Stellantis, Toyota — all want green iron. Even if you look at the newspaper and say: ‘Some people don’t believe in it [decarbonization],’ it doesn’t matter. It’s the law in Japan, and Japan is a big enough market. It’s also the law under CBAM.
I listen to the [chief executive officer] of Mercedes complaining about it, and I understand why. But it’s the law. You might complain about paying your taxes, but you pay them. The incentives are there to change human behavior — and they will.
Recently, Ola Källenius, CEO of Mercedes-Benz, voiced his opposition to the EU’s proposal to ban vehicles that emit CO2 starting in 2035.
Saxton: We’re not targeting those markets [China and similar supply chain models]. Our markets are Japan, the US and Europe. We want to add Brazilian energy, technology and know-how — bringing in technology from abroad, because not everything exists in Brazil — to transform the state of Bahia into the most efficient place in the world to produce green HBI.
Saxton: I would put it another way. Brazil has the natural resources and talent, and all it needs is access to capital and technology transfer to become an obvious powerhouse — just as it is in agricultural production. So, I don’t think you can say that Brazil needs CBAM to be successful. I don’t agree with that.
Don’t get me wrong, CBAM is great. But Brazil doesn’t need it.
Saxton: Yes. That’s for sure. I will make it happen. I’ve spent 20 years doing this, and I’ll spend another 20. I’m not doing this for fun, I’m fully committed. I work with banks that have ten times the financial capacity of [Brazil’s] government. We are going to do it, and it will be successful.
It will completely transform the lives of everyone involved. And later, other companies — I won’t mention names because I don’t want a headline — will copy us.
Discover how Fastmarkets assesses and explains the evolving value of low‑carbon steel and aluminium in a rapidly changing global market.