The early stage aggregation kinetics of bare and alginate-coated hematite nanoparticles are acquired through time-resolved dynamic light scattering (DLS). Varying concentrations of monovalent (NaCl) and divalent (MgCl2 and CaCl2) electrolytes are employed to induce aggregation. In the presence of NaCl and MgCl2, the alginate-coated hematite nanoparticles undergo aggregation through electrostatic destabilization as described by the classic Derjaguin-Landau-Verwey-Overbeek (DLVO) theory. This is ascertained through examination of the favorable and unfavorable regimes of the stability curves depicting the attachment efficiency as a function of salt concentration. Additional evidence may be found in the aggregation kinetics of alginate-coated particles, which, under favorable aggregation conditions, are reasonably close to that of bare hematite nanoparticles. However, in the presence of CaCl2, the aggregate growth rate of alginate-coated hematite nanoparticles is much higher than that which conventional diffusive aggregation predicts. Dispersed hematite primary particles and lower-order aggregates enmeshed within extended alginate gel networks were observed under transmission electron microscope (TEM). The proposed mechanism for enhanced aggregation suggests an apparent increase in the collision radii of alginate-coated hematite nanoparticles through alginate gel network formation from the particle surface. Additionally, cross-linking between unadsorbed (suspended) alginate macromolecules may form bridges between hematite-alginate gel clusters. It is further established that the presence of background electrolyte NaCl in solution is detrimental to the calcium-induced enhanced aggregation.