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A superparamagnetic nanocomposite consisting of magnetic particles in a non-magnetic matrix phase, FexN/BN (x = 3 or 4), is one result of research targeted at reducing the grain size of crystalline materials from the conventional micrometer to the nanometer range. Superior mechanical, magnetic and physical properties are anticipated for small-grain materials. The synthesis of FexN/BN via an inorganic gel is reported in which the precomposite gel is converted to the nanocomposite by thermochemical processing in a reactive gaseous environment.