LATIN AMERICA Cracking the whip on Brazil’s renegade pig iron brigade

Nov 01, 2007 | 08:05 AM |

The threat by Cia. Vale do Rio Doce (CVRD) to axe iron ore supplies to Brazilian pig iron producers not fully conforming with local labor and environmental laws should bring a positive shakeout to a sector dogged by allegations of slave labor and illegal harvesting of virgin forest.

Smaller companies with insufficient resources for reforestation projects or who buy charcoal of unrecognized origin should disappear, leaving the field more open for more-organized, law-abiding concerns.

The threat shouldn't, in itself, impact pig iron production or export levels from Brazil, which was the world's largest merchant pig iron exporter in 2006, accounting for nearly 6.3 million tonnes out of total world trade of 15.2 million tonnes.

"Quite the contrary, the CVRD prohibition will take the Brazilian pig iron industry to a higher level of international acceptability," Sergio Scherer, an industry consultant and partner in pig iron technology company Minitec, told AMM at an inaugural panel on pig iron organized by Brazilian metallurgical and materials association Associação Brasileira de Metalurgia e Materiais (ABM).

"This measure will not affect overall production or export levels because the stronger, legal companies will survive and produce more. Those that do not want to shape up will disappear," Scherer said, referring to a list recently published with the support of pig iron producers association Sindicato das Indústrias Metalúrgicas e de Material Elétrico do Estado do Espírito Santo. The list details the progress—or lack of progress—by producers in developing reforestation schemes.....

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