A hearth furnace for producing metallic iron material has a furnace housing having a drying/preheat zone, a conversion zone, a fusion zone, and optionally a cooling zone, the conversion zone is between the drying/preheat zone and the fusion zone. A moving hearth is positioned within the furnace housing. A hood or separation barrier within at least a portion of the conversion zone, fusion zone or both separates the fusion zone into an upper region and a lower region with the lower region adjacent the hearth and the upper region adjacent the lower region and spaced from the hearth. An injector introduces a gaseous reductant into the lower region adjacent the hearth. A combustion region may be formed above the hood or separation barrier.