Groundwater is an important source of drinking water. However, groundwater worldwide contains up to 50 mg/L of iron, while WHO recommends a concentration < 0.3 mg/L for drinking water. Currently, chemical removal of iron is the most utilized method. This however, results in a voluminous sludge waste stream of low value. We propose a new biological concept, in which the dissolved iron will be precipitated to form the more compact and more valuable magnetite.