<p>An efficient two-step plasma oxidation and reduction process was proposed to recover value-added high-purity iron utilizing recycled pig iron (P-Fe). We researched the influence of different additions of industrial grade iron oxide (Fe₂O₃) and processing combinations on impurity removal. This involved 15 minutes of argon plasma arc melting (APAM) oxidation or followed by 5 minutes of hydrogen plasma arc melting (HPAM) reduction at 10⁵ (N m⁻²). Meanwhile, thermodynamic/kinetic elimination models were introduced to describe processes of plasma oxidation, reduction, and evaporation. The obtained 3N high-purity iron demonstrated that, in the first APAM step with 18 pct Fe₂O₃ addition, over 85 pct of Si, C, and Ti in P-Fe were removed, increasing the purity from 91.7 to 99.906 pct. Thermodynamic and kinetic analyses, alongside studies using electrolytic iron (E-Fe), verified that the removal was attributed to the vaporized gaseous SiO, CO, and the stable TiO₂. In the second HPAM step, residual O, N, and S were reduced to less ppm, achieving removal efficiencies of 99.99, 91.7, and 93.6 pct, respectively. The decarburization kinetics revealed high apparent rate constant of 0.00686 s⁻¹ for APAM and 0.00701 s⁻¹ for APAM–HPAM, both with 18 pct Fe₂O₃ as the oxidant. Furthermore, the kinetic model for Mn evaporation unveiled that gas interface mass transfer, with a rate of 1.399 E−7 m s⁻¹ at 1800 K, was identified as the rate-limiting step.</p>