Recovery of iron values from the Barsua iron ore slimes containing 56% Fe, 4.8% SiO2, 7.2% Al2O3 and 7.0% LOI by the addition of synthetic colloidal magnetite and oleate colloidal coating followed by high gradient magnetic separation technique was investigated. The effects of concentration of colloidal magnetite, pH, and magnetic field strength were studied. The detailed characterization studies of the slime samples carried out by SEM, FTIR, and AFM analysis suggested the coating of magnetic material on iron oxide surface. AFM studies of slime and slime coated with colloidal magnetite provided information about the average height and roughness on the calculated area. The image profile of iron ore slimes equilibrated by oleate colloidal magnetite indicated the maximum height due to the presence of an oleate group, which has a strong affinity for iron atoms. Finally, an iron concentrate of 62.6% Fe, 2.0% SiO2, and 3.5% Al2O3 with 72% recovery was achieved at pH7 and at colloidal magnetite concentration of 10–40g/t at 12kG, whereas the recovery was only 62.4% without the addition of colloidal magnetite at the same magnetic field intensity. Display omitted •Recovery of iron values from iron ore slimes using selective magnetic coating•Colloidal magnetite and oleate colloidal magnetite used as the coating agents•FTIR and AFM studies confirm preferential magnetic coating on hematite.•Iron recovery enhanced compared to conventional magnetic separation.