An improved industrial multistage recirculating-fluidized-bed reactor for producing chlorine and iron oxide having an initial "dense" zone and a downstream "dilute" zone. In the dense zone, a fuel is burned, reactants and recirculated iron oxide particles are heated, ferric chloride is vaporized and at least 50% of the ferric chloride is converted to chlorine and iron oxide. In the downstream dilute zone, a solids fraction from 0.005-0.05 is maintained, along with a superficial gas velocity from 1.5-6 meters/second which is from 5-25 times the superficial gas velocity in the dense zone, and the conversion of ferric chloride is continued to greater than 95% completion.