Structure-property relationships in AlNiCo5 permanent magnets in the optimum magnetic state have been investigated so as to uncover the origin of giant magnetoresistance (GMR). According to analytical field ion and conventional transmission electron microscopy, AlNiCo5 consists of two coherent B2-ordered phases. One, #alpha#_1, corresponds to Fe_7Co_3 and the other, #alpha#_2, to Al_(1.1)Ni_(0.9) with some substitution of Al, Ni, Cu and Fe, Co, Cu, respectively. Seventy percent of the GMR-effect can be attributed to superparamagnetic clusters, about 1 nm in size, positioned on the Al-rich #alpha#_2-sublattice. The remaining 30 percent result from 3-6 nm superparamagnetic #alpha#_1-clusters in the form of fine bridges interconnecting large #alpha#_1-particles normal to, or inclined to their direction of elongation.
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