Fe2O3 is commonly referred to as iron oxide, sometimes written as iron (III) oxide, or ferric oxide. It is also known as hematite and diiron trioxide.
Iron oxide is a common component in cosmetics to provide color to lipsticks and eye shadows. It is also used as a pigment to color various other items. The compound is essentially rust, which occurs naturally when iron comes in contact with water and air. Iron oxide forms as a result of the chemical reaction. Basically, the carbon dioxide in the air and the water create a weak acid that reacts with the iron and separates the water into its separate hydrogen and oxygen components. Some of the oxygen atoms combine with the iron to form iron oxide. The process is so natural and common, it is difficult to find iron without rust, according to How Stuff Works.