<p>The Daitari Iron Ore Deposit in the Singhbhum Craton, India, hosts ultrahigh-grade blue dust, a naturally occurring friable and powdery hematite-rich iron ore, with Fe₂O₃ contents up to 95.52 wt% and SiO₂ reduced to as low as 0.9 wt%. This study integrates petrographic observations, X-ray diffraction (XRD), bulk major and trace element geochemistry, rare earth element (REE) analysis, and SEM–EDS elemental mapping to elucidate its genetic evolution. Petrographic evidence documents polygonal martite pseudomorphs after magnetite, progressive dissolution of chert laminae, and extensive destruction of the primary banded fabric, indicating multistage supergene alteration. SEM–EDS elemental mapping reveals a homogeneous iron-rich matrix without Fe-rich veinlets, replacement fronts, or compositional zoning, supporting in-situ residual enrichment rather than hydrothermal iron addition. Quantitative mass-balance calculations demonstrate that enrichment was achieved through &gt; 90% silica removal, while trace element and REE characteristics (∑REE = 44.14 ppm; LREE/HREE = 4.65; weak negative Ce anomaly and slight positive Eu anomaly) indicate limited REE mobility during supergene alteration, consistent with residual enrichment and relative iron immobility. The integrated mineralogical, petrographic, and geochemical evidence indicates that blue dust formation was governed by open-system silica leaching under oxidizing meteoric conditions, with residual concentration of iron and no detectable hydrothermal Fe metasomatism. Comparison with globally significant BIF-hosted iron ore systems establishes the Daitari deposit as an extreme end-member of residual supergene enrichment. These findings refine the genetic model for ultrahigh-grade hematite formation in Archean cratonic settings, provide quantitative constraints on the upper limits of silica-leaching-driven iron enrichment, and contribute valuable exploration criteria for naturally beneficiated direct-shipping iron ore deposits.</p>