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Some acicular Nd2Fe14B grains are precipitated from Nd-rich phase near-coarse grains in melt-spun Nd15Fe77B8 alloy, as confirmed by SEM energy spectral analysis. The Nd-rich phase plays an important role in enhancing magnetic properties on annealing. This result suggests that the melted Nd rich phase may act as a sink for free iron to be captured within Nd-rich phase regions resulting in the decreased iron constituent and enhanced magnetic properties at the annealing temperature at which the Nd-rich phase is melted. After an optimized heat treatment, the higher magnetic properties with ultrahigh coercivity H-c, 1400 kA m(-1), and maximum energy product (BH)(max), 89 kJ m(-3): are obtained. The initial magnetization curves of melt-spun samples are composed of multi-domain and single-domain magnetization processes. (C) 1997 Elsevier Science B.V. All rights reserved.