Basic unshaped refractories are used as tundish lining in the continuous casting steelmaking process. These refractories are composed of forsteritic olivine and periclase. Slag covers the steel bath in the tundish in order to protect the melt from reoxidation. Using TEM, we demonstrate that the fayalite component of the olivine is reduced to metallic iron giving the olivine a dusty appearence in transmitted light. The reduced olivine appears stable under high temperature reducing conditions. We suggest that diffusion of Mg2+ from the outer part of the olivine into empty Fe2+ lattice positions in the interior prohibits formation of SiO2 as by-product of the fayalite reduction. Some of the silica may also have left the olivine in form of gaseous SiO. Periclase reacts with Al2O3 from the tundish slag to form spinel. We show that Mn from the steel melt is oxidized and enriched in tundish slag as well as in the refractory. The steel melt is the only source of Mn in the slag. Thermodynamic calculations show that equilibrium fractionation of Fe and Mn between steel melt and slag results in effective separation of Fe (in steel) and Mn (in oxides/silicates).