Due to the shortage of laterite ore resources in China, most of the raw nickeliferous materials for ferronickel production have to be imported. The low Ni grade (1–2 wt%), high water content (35–45 wt%) and high transportation cost of laterite ore result in costly production of ferronickel and stainless steel in China. This chapter presents a new method for preparing ferronickel from laterite ore based on selective solid-state reduction followed by magnetic separation. The key issues in the selective reduction of nickel oxides over iron oxides and the growth of newly-formed ferronickel grains (particles) were primarily discussed, and the related fundamentals such as thermodynamics, reduction/sulfidation behaviors of nickel and iron oxides in the ore as well as the growth of ferronickel particles during solid-state reduction were investigated. The pilot-scale tests and industrial tests were then conducted to validate the feasibility of the proposed new process.