Keto-acid derivatives of sulfated iota -carrageenan (ICAR) was quantitatively prepared by the oxidation of iota- carrageenan as sulfated macromolecules by potassium permanganate in alkaline medium at pH`s > 12. The diketo-derivative was characterized by formation of 2,4-dinitrophenyl hydrazone and dioxime derivatives when reacting with 2,4- dinitrophenyl haydrazine and hydroxyl amine, respectively. This oxidation product can be used as a dietary fiber and a functional fiber when added to food. In addition, it found that the product has a high affinity for chelation with most of divalent and polyvalent metal ions forming stable coordination biopolymer complexes. The product is characterized by its non-toxicity, low cost and high performance