A method for producing liquid ferroalloy by direct processing of manganese and chromium bearing iron compounds, by the steps: of mixing carbonaceous reductant, fluxing agent, and a binder with materials such as iron sands, metallic oxides, manganese-iron ore concentrates and/or chromium-iron ore concentrates and silica sands, to form a mixture; forming agglomerates from the mixture; feeding the agglomerates to a melting furnace with other materials; melting the feed materials at a temperature of from 1500 to 1760° C. and forming a slag and hot metal; removing the slag; tapping the hot metal as liquid ferroalloy, and utilizing the off-gases from the melting furnace as combustion fuel to drive a turbine and to generate electricity.