Hydrothermal alteration systems in ancient polymetallic terranes are commonly overprinted by deformation and metamorphism, obscuring genetic links between alteration and mineralisation and limiting their use as exploration vectors. The Riddarhyttan area hosts one of thelargest alteration halos in the Bergslagen lithotectonic unit. This Mg-enriched halo is spatially associated with Bastnäs-type Fe–REE-(Cu–Mo–Bi–Au), stratiform Fe-oxide, and sheet-like Fe-sulphide mineralisation, yet its metal fertility remains poorly constrained. This study uses whole-rock geochemistry from rhyolitic metavolcanics, principal component analysis and k-means clustering to objectively classify alteration into four groups validated by field, drill-core and petrographic observations (i.e. weakly altered, K-altered, Mg-altered, and Mg–OH-altered). Results show that both K- and Mg-alteration are dominated by feldspar-destructive processes, while Mg-alteration can be subdivided into a widespread cordierite-dominated assemblage reflecting mass loss and a structurally controlled Mg–OH assemblage characterised by significant mass gain through precipitation of hydrous Mg-rich minerals. Immobile-element constraints indicate systematic depletion of Fe, Pb, Zn, LREEs, Bi, and In in Mg-altered rocks, suggesting that this extensive alteration halo acted as an important regional metal source. Spatial distribution patterns and stratigraphic sequence indicate that Mg-alteration postdates earlier Na- and K-alteration and is broadly  ontemporaneous with the first phase of polymetallic mineralisation (Andersson et al. 2025). However, sulphide and REE mineralisation were subject to substantial post-ore remobilisation. These results highlight the exploration significance of large Mg-rich alteration systems in polymetallic Precambrian terranes.