Iron oxide reacts with alluminium to form alluminium trioxide and iron. This is called thermite reaction and it is exothermic.

Chemical Equation:
Fe₂O₃ + Al → Al₂O₃ + Fe

For balancing:
1. Number of Al on right side is 2 and left side is 1. So write 2Al on left side.
Fe₂O₃ + 2Al → Al₂O₃ + Fe
2. Number of Fe on left side is 2 and right side is 1. So write 2Fe on right side.
Fe₂O₃ + 2Al → Al₂O₃ + 2Fe
3. Number of O on right side is 3 and left side is also 3. No need to change anything for it.

So final equation becomes
Fe₂O₃ + 2Al = Al₂O₃ + 2Fe
1 5 1