Red mud, a by-product of alumina production, holds significant potential as a secondary source of critical minerals. However, improper management of red mud poses serious environmental risks, including soil and water contamination, which can lead to long-term ecological and health impacts. With the global demand for critical minerals essential for technologies like renewable energy systems and electronics continuing to rise, sustainable methods for resource recovery are increasingly important. Red mud contains valuable elements such as rare earth elements (REEs), scandium, lithium, cobalt, and vanadium. Despite this potential, the extraction and recovery of these minerals present considerable technical, economic, and environmental challenges. This review paper examines both traditional and advanced extraction methodologies, including hydrometallurgical and pyrometallurgical techniques, as well as innovative approaches like solvent extraction using ionic liquids and supercritical fluid extraction. additionally, it critically evaluates the environmental risks of red mud mismanagement and highlights the benefits of integrating resource recovery into a circular economy framework. addressing these challenges is essential for developing innovative, cost- effective, and environmentally friendly extraction processes that can harness red mud's resource potential while mitigating its environmental impact.