Hematite in its natural form is Iron Oxide with small amounts of Titanium. It is found in black, gray to silver gray, brown to reddish brown or red. Gemstone quality hematite is an opaque stone that looks similar to metal. While natural hematite does have some natural magnetism, it is usually not enough to measure. Natural hematite is rare and very expensive to mine. Magnetic hematite is a composite material made up of natural hematite, magnetite and small amounts of other minerals such as copper, titanium and aluminum. The resulting material can be permanently magnetized -- unlike natural hematite. Magnetic hematite is produced by heating a powdered mixture of the above materials, blending them together, pressing them into the desired shape (pendants, beads, etc), then heating the shapes in a way that bonds the material. Once they have cooled, the finished shape is reheated inside an external electromagnetic field to give it a permanent magnetism. Magnetic hematite and natural hematite looks and reacts to tests very similarly. It even has the same chemical composition. The result is that it is very hard to tell the two apart.