In this work, a slurry iron aluminide-coated ferritic steel SVM12 was subjected to a laboratory experiment mimicking superheater corrosion in a biomass-fired power boiler. The samples were exposed under model Cl-rich biomass conditions, in a KCl + O2 + H2O environment at 600 °C for 168, 2000, and 8000 h. The morphology of corrosion and the composition of the oxide scale and the coating were investigated by a combination of advanced analytical techniques such as FESEM/EDS, SEM/EBSD, and XRD. Even after short-term exposure, the coating developed a very fast-growing and up to 50 μm thick α-Al2O3 scale in contrast to the spontaneous formation of a protective, thin, dense, slow-growing, and very adhesive α-Al2O3 layer usually formed on metallic materials after high-temperature oxidation. In view of the literature on the formation of oxide scales on alloys and coatings, the formation of an α-Al2O3 scale at this relatively low temperature is very surprising in itself. The thick alumina scale was not protective as its formation resulted in fast degradation of the coating and rapid Fe2Al5 → FeAl phase transformation, which in turn generated porosity inside the coating. In all cases, the resulting thick Al2O3 scale was porous and consisted of both equiaxed α-Al2O3 grains and randomly oriented aggregated alumina whiskers. Potassium is concentrated in the outer part of the Al2O3 scale, while chlorine is concentrated close to the scale/aluminide interface. The unexpected formation of rapidly growing α-Al2O3 at relatively low temperature is attributed to the hydrolysis of aluminum chloride generated in the corrosion process.