Value of iron mining

Iron is the world's most commonly used metal - steel, of which iron ore is the key ingredient, represents almost 95% of all metal used per year. It is used primarily in structural engineering applications and in maritime purposes, automobiles, and general industrial applications (machinery).

Iron-rich rocks are common worldwide, but ore-grade commercial mining operations are dominated by the countries listed in the table aside. The major constraint to economics for iron ore deposits is not necessarily the grade or size of the deposits, because it is not particularly hard to geologically prove enough tonnage of the rocks exist. The main constraint is the position of the iron ore relative to market, the cost of rail infrastructure to get it to market and the energy cost required to do so.

Mining iron ore is a high volume low margin business, as the value of iron is significantly lower than base metals. It is highly capital intensive, and requires significant investment in infrastructure such as rail in order to transport the ore from the mine to a freight ship.