The rare-earth element deposit at Morro do Ferro formed under supergene lateritic weathering conditions. The ore body consists of shallow NW-SE elongated argillaceous lenses that extend from the top of the hill downwards along its south-eastern slope. The deposit is capped by a network of magnetite layers which protected the underlying highly weathered, argillaceous host rock from excessive erosion. The surrounding country rocks comprise a sequence of subvolcanic phonolite intrusions that have been strongly altered by hydrothermal and supergene processes.