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The decrease in the total iron grade of pellets due to bentonite has prompted the search for a non-polluting and alternative binder. While organic binders are considered potential substitutes for bentonite, they cannot fully replace it due to complete decomposition and failure during pellet hardening. Thus, the production of pellets utilizing a composite of organic binder and bentonite has gained significant attention in academia and industry. In this study, a novel polymer-type binder (PTB) was introduced to minimize bentonite consumption during green pellet preparation. By regulating the ratio, the addition of just 0.01% PTB can reduce bentonite usage by 1.0% under optimal conditions, all while maintaining excellent pellet quality. Further investigations revealed that PTB molecules adsorbed on the surfaces of iron concentrate (predominantly magnetite) and bentonite through hydrogen bonding, electrostatic repulsion, coordination, monodentate chelation and surface complexation, and dissolved into a fibrous structure to bridge the particles together. Moreover, the abundant hydrophilic groups (-OH, –COOH) in PTB substantially enhanced the water-holding capacity of green pellets, resulting in a reduced rate of drying dehydration and an elevated shock temperature. This comprehensive study provides valuable scientific insights into the development and application of composite binders.