This work has the objective for studying the effect of the state of the oxide phase (slag forming) in the iron nuggets production process. The composite pellets were obtained by mixing pure hematite, pure graphite or charcoal, and Portland cement. Pellet (P1) with hematite + graphite + cement presented a prospective slag liquidus temperature of 2273K and pellet (P3) with hematite + charcoal, and with a prospective slag liquidus temperature of 1873K. Pellets (P2) and (P4) were obtained by SiO2 and Al2O3 addition in the pellets (P1) and (P3), respectively, to obtain a prospective slag liquidus temperature of 1573K. The reduction behavior and coalescence of the reduced iron, of these pellets, after heating at 1573K during 10 minutes followed directly to 1673K and keeping at this temperature during 10 minutes more, were observed. The coalescence of the reduced iron particles was observed only when the liquid phase slag was formed. This phenomenon probably occurs because solid oxide particles between the iron and carbon particles can prevent direct carburization reaction. This barrier is eliminated when liquid phase slag is formed.