Grinding sludge, a byproduct of metal processing industries, contains a significant amount of iron (Fe), making it a valuable resource for recovery and reuse. This study investigates the magnetic properties of Fe-rich grinding sludge, its separation efficiency, and its application as a magnetic adsorbent for water treatment. Vibrating sample magnetometry (VSM) revealed a saturation magnetization of 75 emu/g, indicating high Fe content. Magnetic separation achieved a recovery efficiency of 80% with 90% purity of the magnetic fraction. The XRD analysis confirmed the presence of Fe₃O₄ and α-Fe phases, with characteristic peaks indexed to their respective planes. The sludge was further tested as an adsorbent for lead (Pb2⁺) removal, achieving 85% efficiency within 60 min and demonstrating excellent reusability over three cycles. These findings highlight the potential of utilizing grinding sludge as a sustainable resource for environmental remediation applications.