Mithril is the most precious metal in Middle-earth and it was very rare. The dwarves discovered and mined Mithril in the Mines of Moria. By digging deeper and deeper they finally unleashed Durin's Bane. Bilbo was given a Mitril Armor during his adventures with the dwarves. He passed on this mithril coat to Frodo. He kept the coat hidden under his garments and it saved his life in Moria when it stopped a spear from killing him.
