Effects of dispersant (Tri polyphosphate sodium) amount on gel viscosity, mechanical activation of raw materials, raw materials mixture composition, and reduction atmosphere on the prepared composites and NiO reduction mechanism were investigated. It was found that 2.5 wt % dispersant is an optimum amount for a gel suspension with 50 V% of solid consisting of alumina, graphite, and nickel oxide. XRD results of reduced and sintered product (at 1200-1500 °C) showed that alumina, nickel, and nickel aluminate spinel are present in the prepared composite. The porosity of the composite made with 12 h ball milledalumina was 48%, while it was 64 % in the sample made with 20 min ball-milled alumina. The results of TG-DTA analyses showed that the reduction temperature and mechanism are dependent on the raw materials' ball milling time. Thermal analyses revealed that mechanical activation of raw materials decreases the NiO reduction temperature and increases the metallic Ni production.