Iron in RECl3 solutions is a detrimental impurity, adversely impacting both the purification efficiency of RECl3 and purity of rare earth compounds. RECl3 solutions employs the neutralization precipitation method for iron removal, leading to iron slag rich in valuable rare earth elements and radioactive thorium. This practice not only results in rare earth resource wastage but also poses significant ecological challenges. This study introduces an innovative hematite method for efficient and enhanced separation of rare earth and iron from RECl3 solutions. This method involves adjusting the solution's pH using alkali in a high-pressure reactor. Results indicate optimal conditions: a OH− to Fe3+ ratio of 1.5:1, temperature at 180°C, duration of 3 hours, and a Fe3+ (as Fe2O3) to Fe2O3 crystal seed molar ratio of 1:1. Under these conditions, the iron slag contains 1.3% REO and 63.69% TFe, with a rare earth loss rate of 0.35% and a TFe removal rate of 90.36%. Thermodynamic analysis reveals that at 25°C, ammonia water adjusts the pH of RECl3 solutions to 2-3, with the presence of Fe(OH)2+ and Fe(OH)2+ in the solution. The potential pH diagram of Ce-Fe-H2O at 180°C indicates that a pH range of -1.87 to 2.99 is crucial for Fe2O3 and Ce3+ formation. SEM analysis shows that the iron slag phase is a densely packed elliptical hematite sphere of approximately 1 micron and contains 0.36% thorium. This new hematite method using alkali-regulated high-temperature and high-pressure conditions for iron removal from RECl3 solutions not only minimizes rare earth loss but also mitigates iron slag's environmental impact. Furthermore, it offers a novel iron removal technique for the smelting industry.