Abstract: The reduced oxide ore from Bayan Obo with high metallization rate was obtained via a high-efficiency reduction process, then the efficient concentrations of such metal elements as Fe, Nb and RE were implemented. The reduced ore with metallization rate up to 94.48% was obtained by optimizing the operation parameters in tests such as reducing temperature/time and carbon ratio, and, after stepped grinding and grain-size separation, the Fe grade 91.61%, metallization rate 93.79% and Fe recovery rate 93.23% were obtained as the starting material for steel-making. In the tailings the REO is 12.25% with recovery rate 98.73%, i.e. available to be the raw material for RE beneficiation.