In FFXIV, Island Iron Ore is a type of crafting material acquired on a player’s Island Sanctuary. It can be found in several locations throughout the landmass. However, it appears in the densest concentration on the mountainous area called Sunrise Lookout. You can find it inside of gathering nodes labeled Rough Black Rock — which appear dark gray with brownish blobs.
Note that you must first craft an Islekeep’s Bronze Beakaxe. Not to be confused with the Islekeep’s Stone Hammer, which is the lesser form of Island Sanctuary tool used for gathering from rock formations. Attempting to gather from a Rough Black Rock before crafting the beakaxe will only yield Island Stone. After the tool is crafted, every gathering attempt will yield both one piece of stone and a single piece of Island Iron Ore.