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This paper present the results of a study made to assess the grades of iron ore deposits in parts of Noamundi area using the hyperspectral image data (EO-1 Hyperion). The study involves hyperspectral image data, preprocessing (removal of atmospheric effects), spectral curve generation from the image, extraction of certain spectral parameters and spectral data analysis. Atmospheric correction was carried out by using algorithms involving atmospheric analysis of spectral hyper-cubes and Quick Atmospheric Correction modules. Spectral curves generated for the pixels that contain iron ores resemble the spectral signature of iron ores, i.e., very strong absorption at 850-900nm region is observed. The strength of the absorption varies spatially at different pixels. Hence, spectral parameters such as radius of curvature of NIR absorption trough (750-1000nm), position of NIR absorption trough and distance from a reference(100% reflectance) line have been derived for all the image-derived spectra and were compared with the concentration of iron in the ore samples of mines. Empirical models were generated by relating the image-derived spectral parameters of iron ore locations and geochemistry of the samples collected from the same location which shows a reasonable match. Strong negative correlation is seen between the radius of curvature of the NIR absorption trough and concentration of iron with a R value of 0.809. The position of the NIR absorption trough is seen to shift towards longer wavelengths with decreasing iron content and the distance from the reference line increases with increasing iron content. Thus, this study indicates that it is feasible to discriminate the grades of iron ores from the spectral parameters derived from Hyperspectral satellite images. [ABSTRACT FROM AUTHOR]