Mercury (Hg0) emission from coal‐fired industrial plants poses severe threats to ecosystem sustainability and human health, urging the development of novel and cost‐effective adsorbents to treat industrial flue gas. Herein, the modification of industrial residual red mud (RM) through the impregnation of hydrogen halides (HH) and its adsorption characteristics for removing elemental mercury from combustion flue gas was reported. Experimental investigation of HH‐modified RM reveals that the hydrogen iodide (HI)‐modified RM with a concentration of 1.5 M had a maximum Hg0 removal efficiency of 98%, whereas hydrogen bromide (HBr) 1.5 M modified RM had a maximum Hg0 removal efficiency of 90%. The effect of various parameters, such as reaction temperature and halide concentrations, were also found to be influential for the adsorption efficiency of the modified RM. Moreover, it is important to highlight the chemisorption characteristics of HI‐modified RM, which significantly enhances the efficiency of the removal process. The Hg0 removal efficiency increases with the increase in HI concentration (1.5 M @ 93%) with an optimal reaction temperature of 140°C. Furthermore, the maximum Hg0 removal attained with a change in NO concentration was 98% at 200 ppm. However, increasing the SO2 concentration reduces the efficiency of RM for removing Hg0 in simulated coal combustion flue gas. The pseudo‐second‐order model (R2 = 0.98) accurately describes the adsorption of in kinetic investigations, indicating a chemisorption mechanism. This analysis of the chemisorption mechanism highlights the efficiency of halide‐modified industrial solid waste, which has the potential to be used in the design of economical and innovative adsorbents for reducing environmental pollution. The present study employed specific reaction parameters such as reaction temperature, halide loading contents, and different flue gas compositions, which had not been extensively explored.