The coal is becoming scarce and cost of energy is increasing significantly. New concept of smelting reduction process is now being developed to minimize use of coal and optimization of iron production. Under smelting reduction process, the iron ore is pre- reduced in solid state to raise metal content of iron. In the second stage, the pre-reduced iron oxide is melted and the process is completed. The molten iron is separated along with some amount of slag. Exhaust gas is reused as reducing gas. Prototype plants are developed in U.S.A, South Africa, China, Japan and Russia to use the smelting reduction technology. This technology is getting popular and iron may be produced by smelting reduction process in the near future. The cost of production may be less in comparison to the existing technologies. Further research is required in this area to stabilize the technology for commercial applications.