Iron ore is the raw material used to make pig iron, which is one of the main raw materials to make steel.98% of the mined iron ore is used to make steel. Indeed, it has been argued that iron ore is more integral to the global economy than any other commodity, except perhaps oil.urrently magnetite iron ore is mined in Minnesota and Michigan in the U.S. , Eastern Canada and North Sweden. Magnetite bearing banded iron formation is currently mined extensively in Brazil, which exports significant quantities to Asia, and there is a nascent and large magnetite iron-ore industry in Australia.