The presence of red mud was found to remove effectively nickel ions from dilute aqueous solutions (50 mg dm−3). Red mud, being an industrial solid by‐product/waste from alumina production during bauxite processing, was found to act simultaneously as an alkalinity regulator, causing precipitation of nickel as the insoluble hydroxide, as an adsorbent of the formed nickel hydroxide and as a flocculant of the resultant fine particulate matter. Sedimentation was subsequently considered as a possible solid/liquid separation technique. Various parameters, such as dispersion pH, red mud and nickel concentrations and ζ‐potential, were examined and promising results were obtained.