I agree with Macksideshow. The blue circle may not predict the "best" city location, but it will ALWAYS show what spots would provide the MOST RESOURCES.
I too have ignored the blue circle only to, 20+ turns later, be disappointed when a new resource is discovered and it's *just* outside of the BFC. And if I had settled in the circle, it would have been inside the BFC.
Since the AI uses these blue circles to settle their cities, it means they do have implied knowledge of the resources ahead of time. They might not know what SPECIFIC resources they will be getting, but they know that by settling *that* location, they will get SOME resources (and more than nearby spots would provide), even if there aren't any resources available at the time they actually settle.
So, in the OP's example, I think it is fair to say that the AI knew that it would be getting some resource(s) if it settled in the bad tundra/ice location. It didn't just settle there and hope something would pop up - it knew something eventually would. I think it may have gotten lucky that it was iron, but it will probably also have oil and/or uranium later on too.
I too have ignored the blue circle only to, 20+ turns later, be disappointed when a new resource is discovered and it's *just* outside of the BFC. And if I had settled in the circle, it would have been inside the BFC.
Since the AI uses these blue circles to settle their cities, it means they do have implied knowledge of the resources ahead of time. They might not know what SPECIFIC resources they will be getting, but they know that by settling *that* location, they will get SOME resources (and more than nearby spots would provide), even if there aren't any resources available at the time they actually settle.
So, in the OP's example, I think it is fair to say that the AI knew that it would be getting some resource(s) if it settled in the bad tundra/ice location. It didn't just settle there and hope something would pop up - it knew something eventually would. I think it may have gotten lucky that it was iron, but it will probably also have oil and/or uranium later on too.