Iron ores are overwhelmingly derived from ancient sediments known as banded iron formations (BIFs). These sediments are composed of iron oxide minerals deposited on the sea floor. Particular environmental conditions are needed to transport enough iron in sea water to form these deposits, such as acidic and oxygen-poor atmospheres within the Proterozoic Era.
Often, more recent weathering is required to convert the usual magnetite minerals into more easily processed hematite. Some iron deposits within the Pilbara of Western Australia are placer deposits, formed by accumulation of hematite gravels called pisolites which form channel-iron deposits. These are preferred because they are cheap to mine.