Types of Iron Ore: Hematite vs. Magnetite

Thursday September 5, 2013, 4:25am PDT
By Staff Writer - Exclusive to Iron Investing News

Iron ore consists of rocks and minerals from which iron can be extracted. Ore is most often found in the form of hematite and magnetite, though goethite, limonite and siderite types are also common. Approximately 98 percent of the iron ore produced in the world is used to make steel.

Hematite

Hematite ore has the chemical formula Fe2O3 and has a very high iron content of 70 percent. Its name comes from the Greek word for blood, haima, because of its reddish color. High-grade hematite ore is also often referred to as direct shipping ore because it is mined and extracted with a fairly simple crushing and screening process before it is exported. Hematite can be found in abundance throughout the world, but the most utilized deposits are in Brazil, Australia and Asia.

Hematite has been the primary type of ore mined in Australia since the early 1960s, according to Geoscience Australia. Approximately 96 percent of the continent’s iron ore exports are high-grade hematite, and the majority of the reserves are located in the Hamersley province of Western Australia. The mountainous Hamersley Range is at the center of hematite exploration and development because it sits on a banded iron formation.

Brazil is another one of the world’s main sources of hematite ore. Its Carajas mine is the largest iron ore mine in existence and is operated by Brazilian mining company Vale (NYSE:VALE). Vale is the second-largest mining company in the world and the largest private sector firm in Latin America. Vale’s headquarters are in Rio de Janeiro and its primary iron ore assets are in the Iron Quadrangle region of Minas Gerais, according to its website. This area has eight projects, all of which are open-pit mines.

In Asia, a great deal of mining for hematite ore is done in China. Known reserves include the Tung-Yeh-Chen hematite deposit and the Dongye hematite deposit.

One of the major advantages hematite ore has over other types like magnetite is its high iron content. That makes the iron extraction process much less costly and time consuming. In addition, hematite ore only goes through one stage of screening and crushing, while magnetite has an additional round of processing.

Magnetite

With the chemical formula Fe3O4, magnetite ore has much lower iron content than hematite ore. That means it has to be concentrated before it can be used to produce steel. However, the ore’s magnetic properties help separate magnetite from rock during concentration.

Magnetite ore is currently mined in Minnesota and Michigan in the United States as well as in taconite deposits in Eastern Canada. A major mining site in Michigan is the Marquette iron range. The deposit was discovered in 1844 and ore was first mined there in 1848, as per the State of Michigan’s website. Among the four types of iron ore deposits found in this area are magnetite and hematite ore.

In Minnesota, magnetite iron ore is mined mainly in the Mesabi iron range, one of the four ranges that make up the Iron Range of Minnesota. In Canada, Labrador is home to the majority of magnetite mining. In particular, mining companies focus exploration and development on the iron-rich Labrador Trough.

Magnetite ore’s most distinctive property is its magnetism. It is the most magnetic mineral in the world. Additionally, obtaining iron from hematite ore can produce a great deal of carbon emissions, and the process for magnetite is much less harmful.

The product from magnetite ore is also of higher quality than from hematite ore. The former has less impurities, making it a premium product that can be sold to steel makers for higher prices. In this way, the elevated cost of processing magnetite ore can be balanced out.

Cliffs Natural Resources (NYSE:CLF) is a major player in the magnetite mining industry. It is the largest producer of iron ore in North America, according to the Minnesota state government. These include six mines that are focused on magnetite ore. For instance, the Empire Mine, located in Michigan’s Marquette Iron Range, has a rated annual capacity of 5.5 million tons. Additionally, its Hibbing taconite mine is in Minnesota’s Mesabi iron range and has an annual rate capacity of 8 million tons of magnetite ore.

The company operates three iron ore mines in Minnesota, which combined have the capacity to produce 18.2 million tons of iron ore pellets per year. Cliffs Natural Resources also owns an iron ore mining complex in Western Australia.