Bacterial protection
A proper iron metabolism protects against bacterial infection. If bacteria are to survive, then they must get iron from the environment. Disease-causing bacteria do this in many ways, including releasing iron-binding molecules called siderophores and then reabsorbing them to recover iron, or scavenging iron from hemoglobin and transferrin. The harder they have to work to get iron, the greater a metabolic price they must pay. That means that iron-deprived bacteria reproduce more slowly. So our control of iron levels appears to be an important defense against bacterial infection. People with increased amounts of iron, like people with hemochromatosis, are more susceptible to bacterial infection. 
Although this mechanism is an elegant response to short-term bacterial infection, it can cause problems when inflammation goes on for longer. Since the liver produces hepcidin in response to inflammatory cytokines, hepcidin levels can increase as the result of non-bacterial sources of inflammation, like viral infection, cancer, auto-immune diseases or other chronic diseases. When this occurs, the sequestration of iron appears to be the major cause of the syndrome of anemia of chronic disease, in which not enough iron is available to produce an adequate number of hemoglobin-containing red blood cells. 
Our bodies' rates of iron absorption appear to respond to a variety of interdependent factors, including total iron stores, the extent to which the bone marrow is producing new red blood cells, the concentration of hemoglobin in the blood, and the oxygen content of the blood. We also absorb less iron during times of inflammation. Recent discoveries demonstrate that hepcidin regulation of ferroportin (see below) is responsible for the syndrome of anemia of chronic disease.
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