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A permanent magnet is called 'permanent magnet' because its magnetism is 'always on', it generates its own constant magnetic field.
Each permanent magnet generates a magnetic field, like any other magnet, which circulates around the magnet in a different pattern.
Similar to when you cut planet Earth at the Equator, it will give you a North pole and a South pole.
The size of the magnetic field is related to the size of the magnet and its strength. The easiest way to see a magnetic field generated by a permanent magnet is to disperse the iron fillings around a bar magnet, which are quickly oriented along the field lines.
Each permanent magnet has two poles, called North and South. Similar poles repel each other while opposite poles attract each other.
It takes a lot of effort to keep the repellent poles of a magnet together, while an effort is required to remove the poles of attraction.
(Credit to : Wikipedia)
Iron, Cobalt and Nickel are three kinds of ferromagnetic elements that constitute the basic elements of a magnet.
Ferromagnetic materials have some unpaired electrons in their atoms. These electrons are always spinning and create their own magnetic field.
An atom consists of a number of negatively charged electrons, orbiting around a positively charged nucleus. These electrons also possess a quantity known as spin, which is roughly analogous to a spinning top. The combination of orbital and spin motions is called the angular momentum of the electron. Angular momentum is perhaps most easily understood in the case of the Earth: The earth spins about a central axis, which means it at has an angular momentum around that axis. The planets also have an angular momentum as they revolve about the sun.
Now, the angular momentum of an electron is a vector quantity, meaning it has direction. The motion of the electron produces a current, which in turn generates a tiny magnetic field in the direction given by the angular momentum. Thus an atom can behave like a dipole, meaning “two poles”. The direction of the orbital and spin angular momentum of the electron determine the direction of the magnetic field for the electron and the entire atom, thus giving it “north” and “south” poles. Different atoms have different arrangements of electrons into their orbits, and thus have different angular momenta and dipolar properties.
A ferromagnetic material is composed of many microscopic magnets known as domains. Each domain is a region of the magnet, consisting of numerous atomic dipoles, all pointing in the same direction. A strong magnetic field will align the domains of a ferromagnet, or in other words, magnetize it. Once the magnetic field is removed, the domains will remain aligned, resulting in a permanent magnet. This effect is known as hysteresis.
Few materials are actually ferromagnetic; however, all substances have a diamagnetic nature. Diamagnetism means that the molecules within a substance will align themselves to an external magnetic field. The external magnetic field induces currents within the material, which in turn result in an internal magnetic field in the opposite direction. This effect is usually quite small and disappears when the external magnetic field is removed.
Some materials are paramagnetic. This is the case when the orbital and spin motions of the electrons in a material do not fully cancel each other, so that the individual atoms act like magnetic dipoles. These dipoles are randomly oriented, but will align themselves to an external magnetic field. However, when the field is removed, the material is no longer magnetized. Again, this effect is typically small. Neither diamagnetic nor paramagnetic materials exhibit magnetic domains.
The atomic behavior of magnetic materials is actually considerably more complicated than this, as it relies on the theory of quantum mechanics. Quantum mechanics is the theory of physics used to describe the behavior of tiny particles such as electrons; like electromagnetic theory, it is complex and involves advanced mathematics.
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