Some of the present authors previously reported that, for production of powder cores with low iron losses, MgO-based insulation coating can be made on iron powder particles by a two-step process. In this study, mechanism of formation of the insulation layer and its structure were investigated. In the first step, iron powder is oxidized in air at 200 - 260 °C, and iron oxide layer, which mainly consists of α-Fe_2O_3, is formed. In the second step, the oxidized iron powder is mixed with magnesium powder, and the mixture is heat-treated in a vacuum at 450 - 700 °C. During this step, magnesium vapor reduces the iron oxide, and MgO is formed at the top of the oxide layer. Magnesium atom and reduced-iron ion diffuse into the precursor iron oxide, and (Mg, Fe)O solid solution layer with a compositional gradient is produced.
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