The main waste formed during the production of alumina by the Bayer method is red mud. This waste has a high content of iron, which can be effectively extracted by the carbothermic reduction and magnetic separation methods. The crucial factors affecting the commercial efficiency of this process are the iron reduction rate and the size of reduced iron particles. This study considers the influence of sodium sulfate addition to red mud on the kinetics of iron reduction and the iron grain growth process. The isothermal kinetics of the iron reduction process at 1000–1200 °C and 5–30 min of time was investigated for the red mud processing without additives and with 13.65% Na2SO4 addition. It was shown that the activation energy value for the reduction without additives was 65 kJ·mol−1, while it was 39 kJ·mol−1 for the reduction with Na2SO4 addition, respectively. Based on the microstructure study of the roasted samples, models were obtained for the calculation of the average diameter of iron grains without and with the additives. The iron grain growth process was thoroughly discussed, and its main mechanism was proposed.