A computational framework for molecular dynamics (MD) simulations of shock-induced reactions in thermite mixtures is developed. The system under study is an Fe2O3+Al thermite mixture. An interatomic potential valid for a range of temperature is formulated for the Fe+Al+Fe2O3+Al2O3 system. The parameters in the potential are determined through the use of Helmholtz free energy within the quasi-harmonic approximation. The potential is a variable charge cluster functional and is capable of describing the multi-component behavior as well as the energetics of the association and dissociation during thermite reactions.