Iron ore, described on some screens as just "iron", is a resource found in hills and mountains in Imperialism 2.
At the start of the game, as soon as you have some, you can combine two units of it to produce a unit of cast iron, which is needed for building roads and ports and for terrain improvement. Until you have found and mined some iron ore, it is essential that your explorers look for it and that you keep enough cast iron to be able to reach it and build a mine. There is no guarantee that you will be able to buy enough of either item.
Iron ore is also (after a century or two) one of the ingredients of steel, the other being coal.
Like the other minerals, iron ore does not appear on the map until you investigate its tile with an explorer - the only exception being that if you play with the European Old World map all minerals in the Old World are fully visible to all players.