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Most of the rare earth elements (neodymium, dysprosium, samarium, etc.) absorb hydrogen into the structure resulting in expansion and cracking of the material which is referred to as decrepitation. Therefore, neo magnets are not recommended where exposure to hydrogen is likely.
Neo magnets also have some limitations due to their corrosion behavior. In humid applications, a protective coating is highly recommended. Coatings which have been used successfully include, E-coat (a liquid dip epoxy coating), dry electrostatic spray epoxy, nickel plating and combinations of these coatings. Changes in composition and processing over the past several years have resulted in significant improvements in corrosion resistance and high temperature performance.
Neodymium magnets have poor resistance to corrosion and they can also corrode from the inside out if proper pre-treatment processes are not followed. Oftentimes a multi-layer Nickel-Copper-Nickel plating is applied, but this may not be sufficient for all applications.