Iron ore with high hydroxyl content such as goethit is widely spread in Indonesia. Such iron ore is not used as feed in ironmaking industry. However due to limitation of primary iron ore reserve such material is an option to substitute the conventional iron ore. Unfortunately the characteristic of iron ore with high hydroxyl content is totally different to conventional iron ore. Such iron ore contains hydroxyl part that can be released at high temperature. This research use composite pellet which is mixture of iron ore and coal. The iron ore contains goethite which is one of iron phase. The composition of two materials is fixed 1 to 3 molar for iron total to fixed carbon. The mixture is formed a pelet before dried. The small part of dry pellet is analysed using STA with 0.6667 °K/s. The reduction is characterised based on thermogravimetry graphs. The research found that the reduction of iron ore occurs in some stages. First stage correspond to dehydroxylation at around 300 °C and second stage corresponds to reduction of iron ore at around 625 °C and 825 °C or 880 °C. The composite lost of 4.64% and 2.85% of weight. The hydroxylation is followed by reduction. Hydroxylation transforms goethite to hematite with lost of water. While the reduction transforms hematite to magnetite and magnetite to Fe.