The rare earth magnets are metals that are ferromagnetic, meaning that like iron they can be magnetized, but their curie temperatures are below room temperature, so in pure form their magnetism only appears at low temperatures. However, they form compounds with the transition metals such as iron, nickel, and cobalt, and some of these have Curie temperatures well above room temperature. Rare earth magnets are made from these compounds.
The advantage of the rare earth compounds over other magnets is that their crystalline structures have very high magnetic anisotropy. This means that a crystal of the material is easy to magnetize in one particular direction, but resists being magnetized in any other direction.
Atoms of rare earth elements can retain high magnetic moments in the solid state. This is a consequence of incomplete filling of the f-shell, which can contain up to 7 unpaired electrons with aligned spins. Electrons in such orbitals are strongly localized and therefore easily retain their magnetic moments and function as paramagnetic centers. Magnetic moments in other orbitals are often lost due to strong overlap with the neighbors; for example, electrons participating in covalent bonds form pairs with zero net spin.
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