There is also a small chance to get ferrous dust if you use normal iron ore in a pulverizer.
And I can confirm that it's found in lower levels, I've been mining for diamonds in my own world and while that turned out to be very hard to find, I've found quite a lot of ferrous ore instead. So essentially mine for it the same way you would mine for diamonds to kill two birds with one stone.
EVE Online characters:
Daedalus II ex-CEO TOGOA, Daedalus III slave of Daedalus II
Little Molok Asura Engineer
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