A factorial design and response surface approach has been employed to optimize the neutralization, partial reduction, magnetization and carbonization of highly alkaline Red Mud bauxite residues as derived from the Bayer process using highly acidic pyrolysis bio-oil as the limiting reagent. The impact of the factors temperature, reaction time and – most importantly – the minimum bio-oil/Red Mud ratio required was explored. The significant response parameters evaluated were the minimization of the sodium content and the quantity of the aqueous phase, the maximization of the carbon content and magnetization of the solid neutralized Red Mud phase as well as the stabilization of the pH of both phases close to 7. The optimum process parameters determined provide a starting point for a possible scale-up and suggest a potential pathway for the environmental remediation of Red Mud lagoons using a renewable biomass derived resource.