We are presenting the first quantum chemical molecular dynamics (QM/MD) model simulations for iron catalyzed single-walled carbon nanotube (SWNT) growth based on the density functional tight binding (DFTB) quantum chemical potential. As model systems, open-ended (10,10) armchair tube fragments were selected with 0, 10, and 20 Fe atoms attached in 1,4-positions on the open rims, and ensembles of randomly oriented C2 molecules were included to simulate carbon plasma feedstock molecules. Isokinetic trajectories at 1500 K to 3000 K show that divalent Fe increases the number of coordination partners with carbon and/or Fe, depending on the Fe concentration. Fe/C interactions weaken the tube sidewall due to electron transfer from Fe into antibonding carbon orbitals, and C2 addition occurs mainly in an Fe-C2-Fe bridge addition mechanism, while growth of polyyne chains characteristic for high-temperature carbon systems is suppressed in the presence of Fe on the rims of the growing SWNT. Our findings are the first quantum chemical evidence for the importance of intermetallic interactions during SWNT growth.