Management of bauxite residue is a major issue for the aluminium industry because of its high alkalinity and generated quantities. Bauxite residues are polymetallic with valuable minor metals like rare-earth elements (REEs). Therefore, recovery of REEs with or without other metals from bauxite residue, and utilization of the left-over residue in other applications like building materials can contribute to a solution of the management problem of the bauxite residue. In the first stage of this work, selective recovery of REEs compared to major elements such as iron was studied. Recovery of REEs is low at low acid concentrations and it could be improved by increasing the acid concentrations, especially for HCl, but the dissolution of iron is also high. The high amount of iron going into solution during leaching poses problems in the downstream processes. Therefore, iron was removed from bauxite residue prior to leaching by smelting reduction in presence of carbon and flux. During slag leaching, the selectivity of REEs over iron was clearly improved. However, smelting of bauxite residue requires high amount of energy due to the presence of high amount of alumina. Therefore, the removal (and recovery) of alumina from bauxite residue by sodium carbonate roasting prior to smelting was studied. The sample after alumina removal was smelted without any added flux and it was possible to obtain a clear slag-metal separation. REEs were successfully recovered from slag by acid leaching from alumina-poor slags. An alternative process, called sulfation-roasting-leaching, was also developed to selectively leach the REEs. In this process bauxite residue was mixed with water and concentrated H2SO4 followed by drying, roasting and finally leaching of the roasted product in water. REEs were selectively leached by this process; however, the scandium recovery is low. Preliminary energy and economic analyses show that alkali roasting-smelting-quenching-leaching and sulfation-roasting-leaching are promising processes for treatment of bauxite residue.