The technology of the complex processing of iron-nickel sludge that is magnesium oxide production waste with the production of a modified iron oxide pigment and nickel concentrate has been proposed. The optimal conditions for manufacture of products that are competitive in the category of relevant materials were selected. The anti-corrosion properties of the iron oxide product were investigated and its suitability for the use as a pigment in production of colored concrete-mosaic tiles and ground paints was established. Content of NiO in nickel concentrate was brought to 11%.