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Slaves of Steel Update: |
Pig iron and environmental degradation Iron manufacturers have a tremendous need for charcoal. To produce one ton of pig iron, they must burn 2.6 tons of lumber, explained researcher from the Center for High Studies in the Amazon Maurílio de Abreu Monteiro. With pig iron production in the Brazilian North in 2003 at 2.2 million tons, this represents the burning of 5.7 million tons of lumber. "This is an intensive process of low energy efficiency, which requires a great amount of charcoal. "Only a small portion of the wood used comes from reforested areas, the rest is native forest", he explained. Charcoal performs two functions in pig iron production: as a fuel to generate the heat necessary to operate the iron furnace and as a chemical agent to remove the oxygen during the process. Pig iron from the Amazon is considered the best in the world because it uses vegetable and not mineral charcoal. Mineral coal contaminates the pig iron with high levels of sulfur, impeding its use for production of special steels, those largely used in the automotive industry. In the 1980's, when the first iron foundries were established, the companies said that charcoal would be obtained from large reforested areas. This did not occur, because it is much cheaper to make charcoal from native trees. The vegetable charcoal is an important factor in the production costs of pig iron. It represents more than one third of the final price of the product. In June, a ton of pig iron sold for US$ 142, of which US$55 corresponded to the cost of coal. "It is the raw material through which the iron
companies control the profit margin", he explained. A change
in the situation in the charcoal producing operations requires more
than good will. It requires a new economic configuration in the
steel industry, which also considers the social and labor costs
of vegetable charcoal production. The researchers pointed out the
consequences of the use of the raw material on a large scale: predatory
exploitation of natural resources; poor organization of urban spaces;
the spread of rural tensions and land conflicts; low-pay labor and
unhealthy conditions. Iron and poverty The production system used by the iron companies in the Amazon reinforces an archaic system, based on large landholdings known as latifundios, terrible social and sanitary conditions, low pay, tax exemptions and the absence of investments that benefit the local community. This is the conclusion of the Study "Iron production in Brazil´s Eastern Amazon" published by researcher Maurílio de Abreu Monteiro. In the 1980's the Brazilian government launched a development policy that sought to industrialize and modernize the Amazon region. The process took place thanks to the effects on the chain generated by the construction of an export-based industrial complex. But the strategy did not work. According to the study, the principal economic link of the companies to the region is limited to the demand for vegetable charcoal. Despite the fact that the production of pig iron has increased annually, a contradictory situation arose. Monteiro wrote: "The number of direct jobs generated is small if compared to the population...and cannot stimulate significant change in relation to the regional labor market". Another factor cited by the researcher, is that tax income from the activity also has not been expressive. "The tax exemptions on the profits of the enterprises and on the sale of their products significantly reduce the volume of taxes paid by these companies". Maurílio calculated that there are between 20 thousand and 23 thousand charcoal furnaces operating in the Amazon charcoal producing regions. To operate them, from 10-12 thousand workers are needed. In 2003, the region produced 1.7 million tons of vegetable charcoal.
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This report is part of the publication "Observatório Social Em Revista" - # 6 - June 2004 - Florianópolis, Brazil English version: Jeffrey Hoff Published by Observatório Social
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