Rockwool is a special type of wool that is used for decorating. It has many advantages over normal wool, First, one piece of dye can dye 8 pieces of Rockwool so you don't need as much dye when you use Rockwool. Secondly, Rockwool can be redyed to any other color, whereas normal wool has to be bleached before it can be redyed. Third, Rockwool is fireproof. Finally, Rockwool can be manufactured, whereas normal wool has to be farmed.
To make rockwool you will need an Induction Smelter. The Induction Smelter has two inputs. One input is for sand and one input is for metal dust or pulverized metal. When the induction smelter has MJ power and all the ingredients then it will make metal ingots but it will also make slag as a by-product. The slag can be cooked in a furnace to make Rockwool. As a note, if you feed the ingots back into a Pulverizer then you can use the same stack of metal repeatedly to make slag. The easiest thing to do is macerate cobblestone to get sand and then feed the sand into an induction smelter.
This video shows you how to make Rockwool with a Pulverizer and induction smelter. Rockwool is a special wool that is manufactured by machinery and it works great for decorating.