It would appear to be more subtle than that. BHP, RIO, FMG...

It would appear to be more subtle than that. BHP, RIO, FMG invested in haematite mines because they were cheapest to produce. But China has now clearly indicated a preference for higher-quality ore in order to cut pollution, and that is where magnetite comes in. If this Motley Fool report is to be believed (http://www.********.au/2015/07/17/the-mining-investors-handbook-part-3-iron-ore/) then a very large amount (~200Mtpa) of Chinese domestic production is uneconomic and some proportion of that can be replaced with higher-quality product from the likes of IRD. The report also indicates that in 2015 there was a large premium for the high-quality magnetite, $117/t compared with the $60/t for FMG's lower-grade stuff. I am happy to have a modest holding in IRD and to sit and wait. I would be more nervous if I held FMG.