Anerobic bacteria exist that can oxidize (in the general chemical sense - give electron to some substance) many things, including sulpher in the hot deep sea vents and many compounds. They "ruled the Earth" until green plants evolved, and polluted the atmosphere with oxygen. Now they find shelter in the guts of many animals, humans included (E-coli etc.) that still have very low O2 levels.
What surprised me was they can find enough un-oxidized iron to live. Are they mainly found deep inside the earth's crust.
Billy, I think you are possibly getting confused. These bacteria
reduce iron rather than oxidising it, just as sulphate-reducing bacteria
reduce sulphur.
What they are doing is using iron or sulphur instead of oxygen in their respiration, i.e.
as an oxidiser. When we breathe in oxygen and breathe out carbon dioxide our metabolism is oxidising carbohydrates to obtain energy. However, because the carbohydrate is oxidised, it follows that the oxygen is itself reduced. (The oxidation state of molecular oxygen is zero, while that in CO2 is -2.)
Notionally giving electrons to something reduces it. Notionally abstracting electrons from it oxidises it.
For any interested readers, a simple example is, when you burn sodium: Na (zero) goes to Na (+1), while O2 (zero) goes to O (-2), and in the process oxygen strips an electron from sodium (both notionally and really in this case, as sodium oxide is ionic). If you burn coke (carbon), the resulting carbon dioxide is a covalent molecule rather than ionic, but to determine the oxidation state you pretend it is ionic and that 4 electrons have been stripped from carbon and 2 given to each oxygen, giving carbon an oxidation state of +4 and oxygen one of -2. The electrons are thus only "removed" notionally, in the covalent case. The concept of oxidation states derives from pretending that all compounds are ionic and that the electrons are given to the more electronegative element - oxygen in this case but it could equally be a halogen such as chlorine. It has less use in compounds with large numbers of elements and where it is hard to determine unambiguously which are the more electronegative of them.
In these bacteria, the iron is not the fuel, it is the oxidiser and is thus reduced, while the fuel (again carbohydrate) is oxidised.
P.S. Oxidation states are a useful concept in chemistry but can be something of a bastard to apply correctly - and even worse to explain.