In this study, the interaction between magnetite and the additive olivine was studied after oxidation as well as after isothermal reduction at temperatures in the 500º-1,300º C range. In the olivine sample, the forsteritic olivine particles react partly during the oxidation pretreatment to form magnesioferrite and vitreous silica along the particle corona. This breakdown of the olivine particles during oxidation liberates magnesium from the particles, which do not react until temperatures of above 1,150° C in reducing atmosphere. When the hematite in the sample is reduced, and when the temperature is high enough to allow solid-state diffusion at ~800º C, the magnesium of the magnesioferrite redistributes, so that the magnesium concentration approaches the same level throughout the iron oxide structure. For magnetite, this did not occur until 800° C. At 1,000° C, this magnesium reacts further with the silica in the glassy slag phase, which crystallizes into fayalitic olivine. At this temperature, the magnesium has diffused over distances of more than 600 µm from large olivine particles after 2 hrs reduction. From this point, the primary slag phase in the pellet, until melting, is solid fayalite. Upon reduction to metal, the metallization front concentrates the MgO in the remaining wustite, which can lead to MgO levels of up to 10 mole% locally. The melting point of the fayalite is raised from 1,145º C to a melting range of 1,238-1,264º C due to the MgO increase, as estimated based on phase diagrams, which were adapted to the pellets tested. Much of the olivine that remained unaltered in the oxidation process will be encapsulated by iron before the particles begin to dissolve in reducing conditions and, therefore, plays no role in the reduction before final melting of the particles occurs.