Potassium permanganate is prepared by the fusion of MnO2 (pyrolusite) with potassium hydroxide and an oxidizing agent like KNO3 to form potassium manganate, which disproportionates in a neutral or acidic solution to form permanganate.
2MnO2 + 4KOH + O2 →Δ 2K2MnO4 (Potassium manganate) + 2H2O
3K2MnO4 + 4HCl → 2KMnO4 (Potassium permanganate) + MnO2 + 2H2O + 4KCl
Fe2+ is a reducing agent which reduces Mn+7 to Mn+2, which is almost colourless. Hence the purple colour of acidified permanganate solution decolourises when it oxidises Fe2+ to Fe3+.