Selective Reduction of Cold Bound Pellet – Smelting Separation – Ferroniobium Smelting Technology’ is an effective enrichment and extraction process of Nb from iron tailings of Bayan Obo deposit. Theoretical basis for the thermodynamic feasibility of smelting separation process was provided aiming at the thermodynamic problems in the process by analyzing and calculating through thermodynamic diagram, isothermal equation, and the calculation model of activity for slag system of CaO–SiO2–FeO–CaF2–TiO2–La2O3–Nb2O5. The results show that the separation of iron and Nb in arc furnace by smelting separation is feasible. In smelting separation process the valence state of Nb in slag is mainly pentavalent and the activity coefficient of Nb2O5 is 0.4×10-5~5.8×10-5. The distribution ratio of Nb between slag and molten iron decreases with increasing temperature or [%C], whereas increases with increasing basicity (CaO/SiO2). The temperature should be controlled under 1450°C, the basicity (CaO/SiO2) should be elevated appropriately, and [%C] should be controlled under 3.6% at the final stage of smelting separation process.