To explore the spontaneous magnetization of iron-bearing rare earth ores during suspension roasting, binary minerals containing hematite and bastnaesite were used to investigate the effects of the roasting temperature, roasting time, and bastnaesite-to-hematite mass ratio on in-situ reduction of hematite in a N₂ atmosphere. Relevant analytical tests were used to explore the mineral phase evolution during roasting, the magnetism and microstructure of the roasted products, the phase composition, and the surface element valence of concentrate. It was found that magnetic separation of the iron concentrate afforded an iron grade of 68.87% and a recovery of 93.18% under the optimum roasting conditions. During roasting, bastnaesite decomposed to generate CO₂ and CO, and the compact structure of hematite was gradually destroyed, resulting in microcracks. Subsequently, the CO entered the surface of the hematite through the microcracks and reacted to form a magnetite shell, and the magnetite-encapsulated hematite particles were recovered via low-intensity magnetic separation.