Nickel slag is one of the side output from nickel ore smelting. Further utilization is needed to be processed because nickel slag has valuable elements in it. In this research, palm kernel shell charcoal is used as a reducing agent which considered as better option to avoid the green house effect and it's environmental friendly characteristic. The pyro-metallurgy process is done by heating the nickel slag using furnace CWF 11/13 with the addition of sodium carbonate 10% and the mass ratio palm kernel shell are 5%, 10%, 15%, 20% respectively with operating temperature at 1000°C for 60 minute. The result of the reduction then follows with magnetic separation using magnetic dressing type 39000. The result is tested using XRD and AAS which showed the different phase and content of nickel and iron decrease as the ratio of palm kernel shell charcoal increases. Based on the result, optimal parameter for nickel content is obtained by 10%-15% palm kernel shell at 1000°C for 60 min.