Clark,
Iron ore is usually screened at the mine or beneficiation plant. Coarse and fine ore was shipped separately. Coarse ore could go straight into a blast furnace. Fine ore was usually sintered at the steel mill into chunks along with flue dust, mill scale, and other iron-bearing waste products, otherwise the fine ore would get blown out the top of the furnace. Slag, mill scale, and even scrap metal have been used as an iron source in cement plants. Iron oxides act as a flux to lower the energy needed to complete the chemical reactions in the kiln. Sounds like it could flux the kiln refractories as well! In steelmaking furnaces, refractory linings are chosen to resist a certain slag chemistry (acid or basic), and are damaged if the chemistry is off.

I have a pail of fine ore from the site of a very small washing plant a few miles east of Stewartville, near my brother's home. It's all under 1/4" particle size. At the same site, I picked up fist-sized chunks. The finer ores there were contaminated with silty clay, which was removed by a washing process to bring them up to grade.

There are/were some very small iron ore deposits scattered around Iowa and noted in various geologic studies, but I haven't run across any evidence that they were mined.

Cheers, Rick