We report on the production of hydrogen in molten salt and its in situ utilization for the reduction of ball-milled Fe2O3–Cr2O3–NiO mixed oxides. In this process, the mixed oxides in the form of powders are directly reduced by the hydrogen electro-generated in molten LiCl through the galvanostatic polarization of an iron cathode immersed in the melt at 670 °C, providing an order of magnitude higher extraction rate than those of conventional electrolytic technologies. The reduced powder has a nanostructured morphology consisted of Ni- and Cr-rich Fe nanocrystals, with no detectable intermediate phase. This processing approach is substantially less complicated and more sustainable in comparison with the available methods for scalable production of alloy powders.