North America is home to substantial high-grade iron ore reserves. The US, with potential reserves of 6.9 billion metric tons, or around 4% of the global iron ore reserves, has the largest iron ore reserves in the region, followed by Canada with a 3.6% share of the global reserves. North American iron ore reserves are predominantly magnetite and hematite grades, which are rich in ferrous content and require no further beneficiation. North America's iron ore reserves are mainly found in the provinces of Minnesota and Michigan in the US, and in the Quebec, Newfoundland and Labrador provinces of Canada.

According to Danny Esposito, contributor to financial e-newsletter Penny Stock Detectives, iron ore is the most critical ingredient in producing the most commonly used metal in the world: steel. Steel is 95%-98% composed of iron ore. Since much of the world’s strong growth is coming from Asia—especially China—iron ore has become critical for those countries.

“For a third straight year, India has reduced its exports of iron ore,” said Esposito. “India previously sent most of its iron ore to China, but the government and the country have realized that it needs the metal to build out its own bridges and buildings.”

As a result, India is expected to produce approximately 150 million tonnes of iron ore in 2012, but will probably export only 30 million tonnes, down over 40% from 2011, according to Esposito. With India cutting back, the analyst says that countries like Australia and Africa have increased their iron ore investing, as their mining companies are scrambling to supply China’s appetite.

Australia’s largest export commodity is iron ore, reports Esposito. With China buying 60% of the world’s supply of iron ore and India cutting back significantly, the Penny Stock Detectives editor says that this is an opportunity for Australia to further increase its iron ore investing, and its mining companies are taking full advantage.

Africa has a quality of iron ore that is equivalent to Australia’s but it has had trouble finding financing for its iron ore investing. China has stepped in and invested significant money in Africa’s iron ore investing and in Africa’s mining companies in order to secure the supply of the metal.