ABSTRACT An attempt was made to produce an iron bearing and a titanium bearing product, using solid state reduction of Fanouj mine titanomagnetite concentrate. For this purpose, the concentrate was mixed with pulverised coal and sodium carbonate and was reduced in a muffle furnace. The product was then subjected to magnetic separation. In this work, the effect of temperature, time, added coal and additive amount on reduction was studied. The Separation Efficiency (SE) index was used for optimisation of the process. Using SE is more appropriate than degree of metallization, which is usually used, for optimising reduction processes. The results show that the optimal conditions are 1325°C, 2.5 h, 25 percent added coal and 2 wt% additive. Under optimal test conditions a magnetic product containing 90.7wt% iron and a non-magnetic product containing 28.6 wt% titanium oxide was produced. The recovery of iron and TiO2 were 95.1% and 93.8%, respectively.