Carbon monoxide helps reduce iron oxide to iron [1]

[1] https://chem.libretexts.org/Bookshelves/Inorganic_Chemistry/...

He means that you use carbon monoxide and iron-compound-rich mars dust to get elemental iron and carbon dioxide.

This is how a blast furnace works

https://en.wikipedia.org/wiki/Blast_furnace

since it partially burns coke to make CO which reduces FeO to Fe producing CO2. An alternate approach is to reduce FeO with hydrogen producing H2O. Either way this is likely to be a circular process in a space economy since volatiles like H2O and CO2 are precious.

He's talking about how elemental iron on earth binds to oxygen and that carbon monoxide could be used to reduce this but I have no clue wether martian metals are oxydised or not.

Where do you think Mars red color come from?

https://www.space.com/16999-mars-red-planet.html

We think Mars had plenty of oxygen in the past, but because it's a smaller planet the molten core solidified. Without molten core no magnetic field, and without magnetic field most of the atmosphere was stripped away due to solar radiation, leaving only some heavy CO2 behind.

With that in mind, any metal ores had plenty of time to oxidize just like on earth. But metal from asteroids that impacted over the last two billion years or so should be unoxidized.