The ineffective utilization of resources and the potential harm to the ecological environment are both consequences of the accumulation of red mud (RM). This study focuses on synthesizing ferromagnetic materials (FMs) through a hydrometallurgical method, using compounds containing iron (CCI) derived from RM. The study primarily focused on process design, thermodynamic analysis, and environment assessment. Effectively, this procedure resulted in the production of two varieties of FMs: Fe2O3 and Fe3O4, exhibiting purities of 94.8 % and 98.6 %, correspondingly. The utilization of different concentrations of various flocculants (APAM, PAM, and CPAM) resulted in a substantial improvement in the flocculation process, with APAM demonstrating superior effectiveness. Based on the results of environmental assessments, it was found that the levels of toxic and hazardous substances in the residual solids were below 0.01 wt%, while in wastewater they were below 10−6 mol L−1. Furthermore, the study put forward mechanisms to explain phase transformation, flocculation, and magnetic separation. The thermodynamic calculation provided insights into the energy variation and reaction extent during the controllable synthesis of FMs. The current study provides a feasible resolution to improve the efficiency of resource recovery and reduce environmental pollution, thus encouraging the adoption of cleaner production methods.