Hematite is a heavy and hard mineral composed of iron and oxygen. Finding it on Mars is not all that surprising. Mars has a red colour that is due to iron oxide on its surface.

The significance of hematite is how it may have been formed. It is usually laid down at the bottom of warm seas. Finding hematite on Mars is another line of evidence that points to Mars being wetter and warmer in the distant past.

Professor Phil Christensen of Arizona State University says that the coarse-grained hematite found on Mars originates from geothermal activity or from bodies of water.

"These results provide the first evidence that suggests a large-scale hydrothermal system may have operated beneath the Martian surface at some time during the planet's history," he said.

"Even more intriguing is the possibility that the hematite may have come from a large body of water. This is one of the best places to look for evidence of life on Mars."

Geologists may be able to examine the hematite deposit at close quarters in 2001 when a lander touches down on the planet. The landing site has yet to be determined.