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Structural and magnetic properties of the rare-earth compounds R2Fe17Nξ have been studied with neutron-diffraction measurements and self-consistent spin-polarized electronic-structure calculations. The diffraction results indicate for the Nd compound that N goes into two sites in two or more phases of varying fractional N occupations. For the Y compound N occupies only one site. Electronic-structure calculations for Y2Fe17 and Y2Fe17N3 give excellent results for site-dependent Fe moments, and, with spin-fluctuation theory, explain the large change in the Curie temperature on nitrogenation.