PURPOSE: To unify a production stage and to obtain reduced pellets having high strength by blowing pulverized iron ore and pulverized coal together with air into a spouted layer reaction furnace, forming the iron ore in a half molten state into the reduced pellets and recovering the pellets through the throat in the lower part of the reaction furnace.

CONSTITUTION: A mixture composed of pulverized iron ore and pulverized coal is supplied continuously from a hopper 1 through a screw feeder 2 into a reaction furnace 3. Air is introduced through a pipe 4 into the furnace 3 to control the temp. in the furnace to about 1,000W1,150°C. The spouted layer of a reducing atmosphere is formed in the furnace 3 and while the raw material heated to a half molten state flows, the raw material flocculate and grow gradually to spherical pellets. The pellets grown to more than the specified size and weight fall through a single throat 5, which is provided in the bottom of the furnace 3 and has no diffusion plate, into hopper 6. The grain size of the pellets is controlled by adjusting the flow rate of the reducing gas blown upward in the throat 5.