CaO and MgO bearing fluxes are widely used in sinters and pellet to improve their basicity and other properties viz. strength and physico-chemical properties especially, for lowering reduction degradation index of high alumina ore agglomerate. Limestone (CaCO₃ mineral) is presently used as CaO input in agglomeration. Endothermic calcination of CaCO₃ at elevated temperature is energy consuming and kinetic driven process. Grinding to powder also consumes energy. In contrary, calcined lime is relatively softer and disintegrates on hydration. Calcined and hydrated lime both has very good green bonding property also. Though, calcined/hydrated lime is used in sintering replacing limestone, it is hardly used in pelletization. This is because of facing problems viz. crack formation in pellet, loss in bonding efficiency of bentonite, handling of hydrated lime etc. However, suitable adjustment of flux composition and process parameters can make the calcined lime usable in pelletization as advantage. This study is concentrated on optimization of MgO (olivine) flux addition and basicity and finally used calcined lime in place of limestone in developing good quality iron ore pellets with combined flux. It is found that calcined lime fluxed pellet without bentonite and limestone shows very good dry compressive strength (3.5 kg/pellet) and improved green compressive strength (1.5 kg/pellet), drop numbers (12 Nos ), cold crushing strength (310 kg/pellet) and reduction properties. The complete replacement of limestone and bentonite is found with better pellet properties. The bentonite elimination will help minimizing alumina and silica input in pellet and reduce the cost in pelletization.