ABSTRACT Bauxite residue is an industrial by‐product generated during alumina production from bauxite ore through the Bayer process. The worldwide stockpiles of bauxite residue are expected to reach 10 billion tons by 2050 if not processed effectively. Limited industrial‐scale processing (3%–4%) of bauxite residue is mainly due to complex physical and chemical characteristics. High alkalinity and multiple elements make the recycling process complicated and expensive. The following work presents a hydrometallurgical process for effectively recycling bauxite residue to recover high‐purity metal oxide products, including magnetite, alumina, titanium dioxide, and scandium oxide. Bauxite residue is first neutralized after leaching with mild hydrochloric acid, followed by the leaching of iron with oxalic acid and photochemical reduction of leach liquor to obtain ferrous oxalate precipitate, which is further converted to high‐purity magnetite. A pyrometallurgical method is also discussed based on smelting for pig iron extraction and subsequent slag processing for value recovery. A comparative analysis of hydro and pyrometallurgical processes is carried out to highlight the key differences and potential for large‐scale applications.