The growing demand for rare earth elements (REEs) confronted with a parallel supply risk, draws major interest to utilize secondary resources bearing higher REE content than the primary resources. The European Commission has recently identified bauxite as a Critical Raw Material (CRM). In particular, unexploited bauxite residues have invited due attention owing to their abundance (worldwide generation at 120 - 150 million tons/yr) and presence of REEs (0.5 - 1.7 kg/ton) and scandium (Sc) in particular, with Fe: 14-45%, Al: 5-14%, Si: 1-9%, Na: 1-6% and Ti: 2-12%. Nevertheless, it has also to be taken into consideration that higher amassing of this waste is turning into a global concern due to its hazardous impacts and disposal issues owing to its high alkalinity, fine particle size and metal content. Industrial valorization of REEs from stockpiled bauxite residues could possibly unlock approximately a 4.3 trillion-dollar economy globally. This review foresees bauxite as a potential resource for REEs and identifies the problems associated with disposal of bauxite residues. Considering the recycling potential of bauxite residues for supplying valuable metals for technology, biotechnology is seen as a promising alternative to the conventional methods. Comprehensive details including role and challenges of biotechnology in green recovery of REEs from bauxite residues, their scale-up and environmental issues are critically discussed. Furthermore, w.r.t. the bauxite residues, the REE market potential is presented with discussions into future prospects, following the current impact of COVID-19 pandemic on the demand and supply of REE to industrial sectors.