In oil sands froth treatment, an undesirable intermediate layer, often accumulates during the separation of water–oil emulsions. The layer referred to as rag layer is a complex mixture of water, oil, solids and interfacially active components. The presence of a rag layer has a detrimental impact on the separation of water and fine solids from diluted bitumen. The current study focuses on characterisation of solids from a rag layer forming stream of a naphthenic froth treatment plant in an attempt to understand the mechanism of rag layer formation. Through detailed characterisation of rag-forming and non-rag-forming solids, the mineralogy of solids and their contamination were shown to be critical to rag layer formation. The iron-based minerals such as siderite and pyrite were found to be enriched within the rag layer. Analysis of surface organic complexes confirms a high level of organic matter associated with these solids through the binding of carboxylic acid group with iron on solids, resulting in a surface hydrophobicity susceptible for rag layer formation.