A process for catalytic reaction of heavy oils and a particulate solid medium, which comprises withdrawing a part or the whole of the used medium from the reactor, separating the withdrawn particles into the particles which have been rendered magnetic by the deposition thereon of nickel, vanadium, iron and copper originally contained in the heavy oils, and non-magnetic particles, using a high gradient magnetic separator which is so designed that a ferromagnetic matrix is placed in a uniform high magnetic field, and returning the non-magnetic particles of the medium into the reactor for re-use.