 Our group proposes a new titanium smelting process via Bi–Ti alloy. This process is comprised of reduction of TiCl4 by Bi–Mg liquid alloy, separation of Ti from Bi by distillation, and Mg electrolysis. In this study, the Mg electrolysis with Bi–Mg liquid alloy cathode was investigated. We firstly measured the IR-corrected polarization curves on graphite and Bi–Mg liquid alloys by the current interruption method. The results indicated that the Bi–Mg alloy cathode can reduce the electricity consumption of the Mg electrolysis. In addition, from the relaxation curves on graphite and Bi–Mg alloys, the concentration overpotential on the Bi–Mg alloy is mainly due to mass transfer of Mg from the electrode/molten salt interface to the liquid alloy bulk. At current densities higher than 300 mA cm−2, Mg-rich solid phases such as Bi2Mg3 and/or pure solid Mg are assumed to be deposited on the Bi–Mg liquid alloy cathode. Finally, we estimated the electricity consumption of the Mg electrolysis in the new smelting process based on the measured overpotentials, assuming that Bi–Mg liquid alloy cathode is stirred sufficiently and a low current density, 275 mA cm−2, is applied. Under these conditions, the total electricity consumption of the Mg electrolysis in the new process will be lower than that in the Kroll process when the anode–cathode distance is smaller than 8 cm.