It is basically ferric oxide, which may help to reduce ammonium production and indirectly reduce no3, but it is doubtful whether it actually lowers no3 significantly.
See e.g. http://ecosystems.mbl.edu/ses/2007%20projects/carpenter.pdf
One way it may help no3 is through its many anaerobic surfaces for denitrification, but we probably need a large volume of these and a really slow flow rate.