Abstract: Smelting reduction is a front iron making technology for the 21st century. It can produce liquid iron by direct using common coal but not charred coal. The process has many attractive advantages such as concise flow, low investment and production cost, low environmental pollution and high quality molten iron. Combined with a reciprocal chemical technology, energy efficiency can be further improved by transforming mass coal gas, by-produced in smelting reduction,into dimethyl ether, a clean fuel. Method and characteristics of the combined technology are discussed in this paper.