Hematite (or red iron ore) was designated the official state mineral by the Alabama Legislature in 1967. Approximately 375 million tons of hematite was mined in Alabama from 1840 to 1975 (when mining in Alabama ceased), contributing to the development of Birmingham as an industrial center.

In 1904, Birmingham ore was used to cast a statue of Vulcan (the Roman god of fire), which now stands at the top of Red Mountain in Alabama. Vulcan is the largest cast-iron statue in the world (standing over 5 stories high), and the second largest statue in the USA - second only to the Statue of Liberty (made of copper and steel). NASA's Mars Global Surveyor (MGS) spacecraft detected large deposits of hematite near the Martian equator ln 1998. Scientists believe this adds to evidence that there was once water on Mars.

Hematite (iron oxide, or rust) is a common mineral - most red coloring in rock is caused by small amounts of hematite. Quote from the United States Geological Survey InfoBank:

"Crystallization and precipitation from a hot solution is only one of several ways that minerals commonly form. A number of minerals crystallize directly from water. This occurs under certain conditions that favor chemical reactions between elements already present in the water. A common mineral that forms this way is hematite, sometimes called "bloodstone" by jewelers. Hematite usually forms in well-oxygenated water where dissolved iron and oxygen react and precipitate around sand grains, eventually forming red sandstone. "

Hematite is composed of 70% iron (chemical symbol Fe, a metallic mineral). 5% of the Earth's crust is composed of Iron. The inner core of the Earth is believed to be a solid iron-nickel alloy (it's also believed that iron-nickel meteorites represent the earliest material - formed at the beginning of the universe). The human body is 0.006% iron!

98% of mined iron ore is used to make steel. The remaining 2% represents a variety of other uses including inks, magnets, plastics, medicine, cosmetics, and jewelry. Steel is an alloy of iron and carbon (normally containing no more than 1.5% carbon, and often containing other components such as manganese, chromium, nickel, copper, etc., depending on the qualities desired).

Source:

Official symbols & emblems of Alabama: ADAH
Hematite: Mineral Information Institute
The Mineral Hematite: The Mineral & Gemstone Kingdom
The Lure of Hematite: NASA
Vulcan, world's largest cast iron statue: America's story
Steel -definition: Dictionary.com

Links:

Geological Symbols - 50 States List