Bauxite residue (BR) is major by-product of the Bayer process for aluminium production, and its accumulation confers environmental risk due to its high alkalinity and fineness. The high Fe content and the BR abundance render it an attractive secondary source of iron, with magnetic separation being the preferable beneficiation technique applied for quality upgrade.In this study, the recovery of Fe-rich concentrate was investigated, using Wet High Intensity Magnetic Separator (WHIMS) under weak magnetic induction ranging between 70 and 2000 Gs. Aiming to enhance the susceptibility of ferrous phase, a hydrothermal treatment of BR was applied under alkaline conditions in the presence of Fe2+ towards the reduction of antiferromagnetic hematite forming ferromagnetic magnetite of considerable magnetic susceptibility compared to the former ferrous phase. Under processing time of 3 h at 250 °C, the hematite conversion degree and Al dissolution reached ≃ approx. 50 % and 72 %, respectively. As for material conditioning prior to magnetic separation, sole agitation, and agitation in combination with ultrasounds were tested aiming the homogeneous dispersion of particles.After hydrothermal treatment, Fe grade increased by 7.7 % (from 35 to 42.7 wt%), while combined use of agitation and ultrasounds increased Fe grade but decreased recovery. The extended investigation of BR granulometry and minerals liberation revealed that the efficiency of the magnetic separation is radically hindered by these endogenous characteristics.