Iron oxyhydroxides and hydroxides were synthesized from chemically beneficiated high SiO2/Al2O3 low-grade iron ore (57.49% Fe2O3) rejects and heated to get iron oxides of 96–99.73% purity. The infrared band positions, isothermal weight loss and thermogravimetric and chemical analysis established the chemical formulas of iron-oxyhydroxides as γ-FeOOH.0.3H2O; α-FeOOH.0.2H2O and amorphous FeOOH. The thermal products of all these were α-Fe2O3 excepting that of γ-FeOOH.0.3H2O which gave mainly γ-Fe2O3 and some admixture of α-Fe2O3. The hydrazinated iron hydroxides and oxyhydroxides, on the other hand, decomposed autocatalytically to mainly γ-Fe2O3. Hydrazine method modifies the thermal decomposition path of the hydroxides. The saturation magnetization,J s, values were found to be in the range 60–71 emu g−1 which are close to the reported values for γ-Fe2O3. Mechanism of the γ-Fe2O3 formation by hydrazine method is discussed.