Iron ore is most often found in the forms of hematite and magnetite. Learn what makes those types of iron ore different and make an informed investment.
Knowing about the different types of iron ore is useful for investors interested in the space.
Iron, a key material in steel and other applications, is most often found in hematite and magnetite ores, though goethite, limonite and siderite ores are also common sources.
Below the Investing News Network has put together an overview of some basic information about hematite and magnetite ores, including what they are and where they’re found. Keep reading to learn more.
Types of iron ore: Hematite ore
Hematite ore, also called direct-shipping ore, has naturally high iron content suitable for steel making. Because of its high iron content, hematite ore must undergo only a simple crushing, screening and blending process before being shipped off for steel production. For that reason, hematite ore is important for many mining companies.
Hematite ore is found throughout the world. According to Geology.com, "most ore is now produced in China, Australia, Brazil, India, Russia, Ukraine, South Africa, Canada, Venezuela, and the United States."
Hematite ore has been the primary type of iron ore mined in Australia since the early 1960s. Nearly all of Australia's iron ore exports are high-grade hematite ore, and the majority of its reserves are located in the Hamersley mountain range of Western Australia because the range sits on a banded iron formation.
Brazil is another of the world’s main sources of this type of iron ore. Its Carajas mine is the largest iron ore mine in existence, and is operated by Brazilian miner Vale (NYSE:VALE). Vale consistently ranks among the world's top five largest mining companies and is the world's biggest producer of iron ore pellets. The company’s headquarters are in Rio de Janeiro, and its primary iron ore assets are in the Iron Quadrangle region of Minas Gerais.
A great deal of mining for hematite ore is done in China. Known reserves include the Tung-Yeh-Chen hematite ore deposit and the Dongye hematite ore deposit.
Types of iron ore: Magnetite ore
The mineral magnetite actually has higher iron content than the mineral hematite. However, while hematite ore generally contains large concentrations of hematite, magnetite ore generally holds low concentrations of magnetite. As a result, this type of iron ore ore must be concentrated before it can be used to produce steel. Magnetite ore’s magnetic properties are helpful during this process.
Magnetite ore may require more treatment, but end products made from magnetite ore are typically of higher quality than those made from hematite ore. That’s because magnetite ore has fewer impurities than hematite ore; in this way, the elevated cost of processing magnetite ore can be balanced out.
Magnetite ore is currently mined in Minnesota and Michigan in the US, as well as in taconite deposits in Eastern Canada. A major mining site in Michigan is the Marquette Range. Magnetite ore and hematite ore are among the four types of iron ore deposits found in this area.
In Minnesota, this type of iron ore is mined mainly in the Mesabi Range, one of the four ranges that make up the Iron Range of Minnesota. In Canada, Labrador is home to the majority of magnetite ore mining. In particular, mining companies focus on exploration and development in the iron-rich Labrador Trough.
Cleveland-Cliffs (NYSE:CLF) is a major player in the magnetite ore industry, with five iron ore operations that are focused on magnetite ore. For instance, its Hibbing Taconite joint venture operates in Minnesota’s Mesabi Range and has an annual capacity of 8 million metric tonnes of magnetite ore. The company is also the largest iron ore pellet producer in North America.
Now that you know a bit more about the different types of iron ore, would you like to know what the world’s top iron ore producers are? Click here to read about the largest iron-producing countries.
This is an updated version of an article first published by the Investing News Network in 2013.
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Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.