Bacteria which produce an intercellular iron sulfide mineral called greigite are called magnetotactic bacteria.

Originally discovered in 1975 by Richard P. Blakemore, they use these magnetic material as a compass to align themselves to the earth's geomagnetic field.

Pósfai et al. demonstrated in 1998 that greigite "actually forms in magnetotactic bacteria over a few days to weeks from another iron sulfide mineral, mackinawite, which is nonmagnetic".

Reference:
Science 8 May 1998
Vol. 280. no. 5365, p. 797
DOI: 10.1126/science.280.5365.797d

In 2004, Andrew Harrison of the University of Edinburgh, UK hypothesized using Magnetospirillum magnetotacticum to help target tumors. To read more about this see the reports in Nature and in BioEd Online.

Additionally some believe magnetite found in The Allan Hills meteorite from Mars help support bacterial life on mars. Read more about this here - Martian Micro-Magnets.

An additional summaries about magentic producing bacteria can be found here and here.

I'd actually done a short presentation on these in my undergrad days as a "Micro" major - and am glad to know that they still incite the same kind of wonder I'd felt all those years back!