Many models of iron ore pellet induration have been developed on the basis of the first law of thermodynamics. However, the exergy analysis, well grounded on the first and second law, of the process is rare. Therefore, exergy balance test was systematically carried out on a grate-kiln, and energy and exergy analyses have been conducted to investigate irreversibility of the process. A model of iron oxide pellet exergy (IOPEM) is presented according to oxidation kinetic characteristics. It is found that the maximum effect (-6.8%) of the characteristics on the pellet exergy appears in the raised end of the kiln. The exergy efficiency of the system is determined to be 10.7% whereas its energy efficiency 59.9%, indicating a great potential for energy-saving improvements. The exergy analysis reveals exergy destruction ratio of kiln and cooler is 14.1%, and 7.7% respectively, and the largest exergy destruction (74.2%) results from the grate. No violent effect of reference environment temperature on exergy efficiency of major components is observed, indicating the grate is the major source of irreversibility. In a word, this study provides a better understanding of the energy and exergy flows of iron ore pellet induration in the grate-kiln and helps to economize energy. Crown Copyright (C) 2010 Published by Elsevier Ltd. All rights reserved.