Goblinite refers to the metal and clothing resources that can be gathered off of goblin corpses. Depending on the fortress they may be an important supplement to normally produced or traded armor, weapons, and clothing. The clothing content of sieges can almost single-handedly provide an entire fortress with clothes, while melting down weapons and armor can make up for a lack of iron bearing ore at an embark site.
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Goblinite is an important ore, good for iron, copper, bronze, and/or silver. Unlike other ores, goblinite is not restricted to any particular layer, though it is most often found on or near the surface. It occurs in small clusters, which can sometimes be dealt with by a solitary dwarf with a pick, and veins and large clusters which require greater effort to excavate and process. The discovery of a large vein of goblinite is cause for celebration, a holiday known as Goblin christmas. Also, there have been some reports of goblinite spontaneously materializing in the vicinity of armed weapon traps.
Once the mining is complete, the goblinite can be unforbidden and your dwarves can carry it off to the stockpile. To yield the precious metal, each piece of ore must be designated for melting and processed at a smelter; the yield is typically less than that of normal ores of iron and copper, but can be an important resource in a particularly metal-poor location, provided you have sufficient fuel. Many caravans prize raw goblinite, along with its attendant wrappings.
As of the current version dwarves and goblins have the same adult body size, therefore allowing goblinite to be equipped directly without melting and reforging as an early or cheap source of low quality armor for a fortress.
Recent advances in the field of dwarven fashion have increased the demand for the wrapping paper in which goblinite is often packaged. While the dwarves of yore would often throw this into the magma while muttering about FPS, the young dwarves of today have been spotted wearing it.