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Arlemite Ore occurs only at Y=15 or lower. There are about 4 Arlemite Ores per chunk. Arlemite veins come in 1 to 3 ores, making it extremely rare and difficult to find.
Arlemite Ingots can be used to make various tools and weapons. However, it is not recommended to make them because the slightly more common Rupee is a higher tier ore. Arlemite's main use is in the creation of Shadow Bars, which have many other crafting uses, such as the Hellstone Ingot to make the Call of the Watcher and Mysterious Clock.
Arlemite Armor is quite powerful because the full set offers a 80% damage reduction against ranged attacks.