As-cast magnesium alloy WE43, containing yttrium and rare earth elements, was processed by equal channel angular pressing (ECAP). The processing led to a significant grain refinement together with a massive precipitation of the secondary phase particles. Thermal stability of the ultra-fine grain (UFG) structure together with microstructural changes due to exposure to elevated temperatures were studied by several complementary techniques in the temperature range of 160–500 °C. It was found that UFG structure consisting of grains with size of ~340 nm and high density of Mg5RE particles is stable up to 280 °C for 1 h of annealing. Moreover, only negligible change of the microstructure occurred after annealing for 16 h at 250 °C. Excellent thermal stability of UFG structure was caused by fine Mg5RE particles, which suppressed the grain growth. Exceeding the limit of thermal stability of these particles above 280 °C resulted in material softening. Moreover, statistically significant hardening of the UFG material occurred in the temperature range of 200–280 °C. Segregation of yttrium and rare earth elements and eventually precipitation at grain boundaries was proved to be responsible for observed hardening by in-situ and ex-situ transmission electron microscope and positron annihilation spectroscopy analysis. Finally, individual effect of particles dissolution and grain growth on the material softening was investigated and discussed.
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