When I was a new player and searching for whether depth mattered for ore, I read some dated information from early in Terraria's development and thought it true. I wasted way, way too much time digging in the surface and underground. This inspired me to make my own guide and describe the process of finding good ore to mine.
Mining is a key aspect of the gameplay in Terraria. It is the primary means of improving your gear early in the game and will allow you to progress deeper into the world, earn coins, and engage more challenging bosses. Some metals are not gained by mining, but we get to them through this process. I will link to other guides that may help a struggling player while showing examples of where ore can be found in the Terraria world.
Mining Methods: Pickaxe or Drill? Or Neither!
You can use a Pickaxe or Drill to mine, but the Pickaxe is arguably better - particularly for PC players who have access to Mining Potions. Use what you want, but the Pickaxe is just faster because of this. It can be boosted further with the Agile/Light prefix through reforging, and accessories with melee speed will affect a Pickaxe. The knockback of pickaxes can also keep enemies off you while you work. Those things aside, you may like the sound of a drill or find it 'cool'. Do what you want in Terraria and have a good time while you're at it.
There are two other methods - blowing things up with bombs/dynamite (covered below), which can be costly unless you're just saving those you find, and Fishing (PC, but soon on Console (hopefully)). Fishing is quite powerful right now, and to the point that it is something I will not pursue. You can fish up crates and save them for Hard Mode, those crates will then contain Hard Mode ores. Maybe you'd have an easier time getting to Gold/Platnium Armor, initiating Hard Mode, then doing this, but know that players can jump straight to a full set of Adamantite armor upon starting hard by simply Fishing! Don't flame me for not liking methods like this myself, I do want people to be aware of the usefulness. It is mainly so you can minimize the difficult jump in power from Wall of Flesh to the Mechanical Bosses. It is very much worth knowing about, as it is one of only a few ways to get ores that are not available in your world.
First - to get a FAQ out of the way - you will not have every ore available in Terraria in one world, and this can be confusing to a new player. Newly-created Worlds generate with either of the pairs below. The second is generally 'better', but the differences are not huge. You will need a pickaxe of sufficient quality to mine harder metals. The lowest-tier pickaxe that will do this is listed next to the metals with that requirement.
Normal Mode Ores
Hard Mode Ores
Hard Mode worlds will generate either of the below when a Demon Altar is broken with the Pwnhammer. For every 3 altars, the process begins again, only with the same ore you 'rolled' when first breaking them. Each pass through will give less than the first, with greatly diminished returns past the 9th broken altar. Players in Hard Mode can make Drills - they are no more powerful, just lack knockback. It is a matter of taste
Don't worry if you end up with a Copper, Iron, and Silver world - you're not at a great disadvantage. Work with what you get, though you can always make other worlds to tear up as you please. All worlds contain Hellstone to help a player advance into Hard Mode, and later ores like Chlorophyte (which you can grow in mud) and Hallowed Bars even the playing field by being universally available.
As noted, Crimtane and Demonite are not found in large quantity in the world and are mainly gained by killing bosses. Meteorite will only appear in your world if it crashes after you've used a hammer on a shadow orb/crimson heart within the Corruption/Crimson. You've got to make water come in contact with lava - either direction - to make Obsidian (see tutorial linked above). Hallowed Bars (no such ore exists) are gained from defeating the first three bosses of Hard Mode. Shroomite and Spectre Bars are made with Chlorophyte and glowing mushrooms/ectoplasm, respectively. These will get their own guides later, but are worth knowing about. Lastly, Luminite Ore appears only as a reward for defeating the Moon Lord in the PC version of Terraria. The Ancient Manipulator (a reward for killing the Lunatic Cultist) is needed to turn them into bars.
Relevant Terraria Wiki Links
If you'd like comprehensive information on the ores and what you can make with the resulting metal bars, check the wiki:
Now let's look at how ore is distributed in the world in order to help find it more often. Further down, I'll provide some tips on mining techniques, boosts you can get, and general good practices.
I could sum this up in one sentence to those who want to get the best ores: "Dig deeper". You will find almost 0 of some of the metals if you do not go further down. However, there are some caveats. You've got to be able to survive at depth, so shouldn't go running down to the Cavern in wood armor if you're new to the game. Also, exploration yields you useful items and accessories that are vital to success. Ores are distributed such that, at lower layers, you will find the better types of metal in larger ore veins.
Surface & Underground Layers
The Surface Layer does have some Copper/Tin to get you started, but even those ores are not found in very large amounts until you reach the actual Underground layer. The Underground is reached when the background changes. The dirt walls go, and you'll see a rocky dirt background. This layer has Copper/Tin to Lead/Iron Ore in greater amounts than that of the Surface. It is the first layer hardmode players will find useable quantities of Cobalt and Palladium, though larger deposits are found further down.
Caverns & Underworld Layers
There are two other layers as well - the Caverns and Underworld. The Cavern layer is the largest layer and has the most ore available, with an abundance of all kinds but reliable finds for Gold and Platinum. You can note the background will change from the dirt/rock one to one of stone. In the Cavern layer, you will find Silver and Tungsten much more often in the topmost portion of this layer, but even more further down and much more reliable Gold/Platinum veins. The same can be said for the hardmode Mythril and Orichalcum ores. Also for Hard Mode, in the area just above the Underworld where lava starts, you can find Adamantite and Titanium in useful quantities. Hellstone is in the Underworld, down by the lava lakes - it is the best ore to be found in Normal mode, and is required for mining the entry-level Hardmode ores.
So with these examples, I hope you're ready to take your pickaxes a bit deeper even if you're looking for iron or lead. It's important for me to note that it's not the layer exactly that determines where the ore spawns, but rather the depth itself. So being in the cavern is not enough - you want to be further down in the cavern for plentiful veins. There is still plenty to be found in the Underground layer for players who don't yet have a full set of iron or lead armor, but when looking for silver/tungsten or gold/platinum, you are going to have to dig deeper!
Patterns
While a vertical shaft to the Underworld, also known as a Hellevator, and shafts 3-5 wide to contain the Corruption are useful, digging long horizontal shafts is not an efficient way to progress, because you're spending most of the time digging and less time mapping out the area. It's great if you want massive stacks of dirt and stone - which do have their uses - but are not the main goal. It's also an annoyance if you want to build something later. Finding ore is not the only goal of Terraria, anyway. Instead, use existing caves and follow them, sometimes digging toward another. Map out the massive underground of your world and you'll find great stuff, period. These open areas contain treasure chests, life crystals, and pots with useful items and discovering them is slow if all you're doing is mining up dirt blocks. Yes, you could find a lot of ore if you spent a couple of hours digging in a pattern, it's just not a very efficient use of time unless you're entertained by doing so - in which case, have at it!
Mining Helmet and Armor
Use of the Mining Helmet can help immensely, though you've got to give up your helmet to it. It is sold by the Merchant for 4 gold coins. Use of the pants and shirt along with this will give you a 30% mining speed bonus, but those are rare drops from Skeletal Miners in the Cavern layer. Using this equipment can cause you some trouble without passive defense coming from your accessories, though on PC you can switch to normal armor at will with auto-pause enabled should you have any difficult encounters.
Reforge (or make a new) Pickaxe & Consider Accessories
If you have found the Tinkerer, you can reforge gear. Reforging your Pickaxe to Agile or Light will help immensely with the speed at which you can mine and dig through to new tunnels. It's worth it. Even without the Tinkerer, you can use excess materials to forge another Pickaxe should you roll a sluggish one, for example. Attack speed only increases mining speed when it's directly on the pickaxe, aside from special bonuses like the potion and mining set. Accessories like climbing claws and metal detectors may be great for mining but not so great for combat - they can be reforged to have critical chance or defense to help you deal with monsters while mining. Don't bother with reforging for attack speed if you've got a Drill as Melee Speed doesn't affect them. It's probably why you should just use a Pickaxe ;)
Light it Up
Torches are otherwise a necessity. Make your own with wood and gel from slimes, or else buy stacks of them from the Merchant. Lighting areas as you go not only helps you later when traversing an area, it also lets you see your surroundings and any obvious ore deposits.
Rope, Platforms, & Grappling Hooks
Rope and platforms can be extremely useful in getting to hard-to-reach ores. Later, you can just use a Grappling Hook. Turn your ropes into rope coils so that you can throw them and ascend. Thousands of rope can be gained from the guide to plant fiber cordage accessory you'll sometimes find. Grappling Hooks can be made by combining a Hook (dropped from Skeletons and Piranha) with Chains (crafted from lead/iron bars). You can also make better hooks by combining 15 gems.
Bombs and Dynamite
While destructive, you can use bombs and dynamite to blow up blocks and retain all the ore. There are only a few types that cannot be destroyed by bombs, so it's effective if you want to clear a large area. Tip: to do this effectively, make them Sticky Bombs by combining them with Gel from Slimes. That way, you can hurl it up toward the cursor and get at materials that are out of reach. It's also flat better because it's more accurate - bombs tend to bounce. Dynamite can also be made sticky, which makes it useful when thrown vertically.
Extractinator
Save Silt, Slush, and Desert Fossil Blocks. These three types can be used should you come across an Extractinator during your adventures. Placing this structure, then having ore selected and clicking the Extractinator will yield you anything from a few coins, to Platinum ore and any gem type. It is super-effective at making some extra money and perhaps finishing a set of armor. In a new game, having this thing at my base makes me happy any time I find a large silt or slush deposit. I knock out all of them and keep the stack for my Extractinator!
Spelunker & Mining Potions
Get Alchemy on your side! There are a few potions that are incredible for Mining in Terraria. Night Owl Potions will make light sources more powerful for you. The Shine potion makes you emit light so that you don't need a torch to see, while the Mining Potion helps you by providing 25% faster mining speed. The Spelunker Potion will reveal the treasures around you - completely revealing all ore, treasures, life crystals, and vases in the visible area. Really, it shows just about everything you'd want to pick up including Life Crystals. Making 4-5 of each of these, you can come out with a huge quantity of ore if you stay focused and spend the 20-25 minutes they last. Super useful, and almost makes it too easy to get a full suit of good armor. Read the tutorial for how to make these 4 useful Mining Potions.
Skeleton Merchant: Spelunker Glowsticks (PC 1.3)
Players on PC can purchase Spelunker Glowsticks from the Skeleton Merchant you find while exploring the Underground and Caverns. He sells them for less than 2 silver each, and a full stack is worth a purchase. Just one can be useful, but you might accidentally throw it away and be unable to pick it up. Just holding one, let alone throwing it, highlights nearby ore and treasures - not reveal them like a Spelunker potion, but you'll know something is there by a vein's distinct shape.
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