Actually... it is correct but, no for dust... “Polvo“ refers to both dust (the most common usage) but also to “powder“ (not as common but common). In this sense... “Pepper is a powder“ is absolutely correct, thus “It's a powder.“ is a correct reply to the question “What is pepper?“
Well, actually in spanish you wouldn't say "es un polvo" to talk about dust. "Un polvo" means sex in a very informal way of speaking.
ellos echaron un polvo --- they had sex
Polvo (dust) is countless, so you can't talk about un polvo, dos polvos, tres polvos... unless you are talking about copulation..