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Although there are actually a number of different iron oxides the two most important ones are hematite and magnetite. Hematite is iron(III)oxide and magnetite is iron(II)oxide.

Hematite needs an aqueous environment and plenty of water to form. So the presence of hematite implies that those two conditions are satisfied. Hematite occurs in banded iron formations (BIF). Banded iron formations are some of the oldest rocks on earth and the presence of the hematite is due to the oxygenation of the Earth's early oceans. 

Like all minerals, hematite can form geometric euhedral crystals. It is more common to find it in a bottroydial habit. Hematite varies in colour from silver to red, however it always has a red streak when it is run across a white ceramic tile, and has a red powder when ground. Hematite and hematite rich soils have been used in pigment since prehistory and play an important role in the very first human art.

Hematite is not actually magnetic and the various forms of magnetic hematite are actually industrial compounds and not hematite at all.