In EarthBound, it blocks paths in Peaceful Rest Valley, Monkey Caves, and the southern island of Winters. They can only be removed by the Pencil Eraser. This statue is the only other destroyable statue in the game besides the Iron Eraser, which is removed with the Eraser Eraser.
In Mother 3, there are only two Iron Pencils and they both appear in the Hall of Memories level of the Empire Porky Building. The first is iron and can only be viewed by Lucas and co. as their boat drifts past its pedestal, whereas the second that appears in the next room is bronze and is optional to remove, though doing so does nothing whatsoever. There is a gift box close to it containing the only Pencil Eraser in the game, which will erase the statue.In the Japanese version of the games, the Iron Pencils were originally octopus statues. Shigesato Itoi later explained that this was because he analogized the feeling of being lost and not knowing what to do with having one's path blocked by an octopus. However, this was changed in the localization of EarthBound, possibly to better fit in with the Iron Eraser's change, and was subsequently also modified in The Unofficial Mother 3 Fan Translation of Mother 3, to better connect the game to the English version of EarthBound.