Recent research is investigating deoxidation electrolysis for eco‐friendly iron extraction. However, many parameters are not fully understood and inconsistencies in reported Faradaic efficiencies pose challenges for finding the most suitable experimental conditions. Thus, we investigated the dependence of hematite reduction efficiency on process parameters and cell configurations. Firstly, we studied the influence of the anode material. The experiments included cyclic voltammetry to identify the redox potentials, electrolysis, and X‐ray diffraction followed by Rietveld refinement to analyze the pellets after electrolysis. In some cases, scanning electron microscopy equipped with energy‐dispersive X‐ray spectroscopy was employed to track the elemental map of the cathode pellets. Nickel/iron alloy, a well‐known oxygen‐evolving electrocatalyst material, clearly outperformed other anode materials, namely graphite, titanium, nickel, and platinum. Subsequent investigations explored the impact of an inert atmosphere and anode‐cathode decoupling on Faradaic efficiency. The findings indicated that the decline in Faradaic efficiency cannot be solely attributed to the hydrogen evolution reaction, but also to other parasitic effects such as carbon cycles. Additionally, we employed energy consumption measurements as a mean of comparing the process against established extractive methodologies. The required energy consumption by electrolysis is up to 46 % lower than that of a blast furnace.