|MadSci Network: Chemistry|
Sorry it's taken a while to get back to you with your response...
It's not actually the Austenite phase that causes the loss of magnetic properties of Iron, it's the temperature of the iron itself.
Magnetism in iron is believed to be caused by the alignment of the spins of the electrons located in the third d shell of each atom. Each atom has a magnetic dipole moment, and in ferromagnetic materials, zones of atoms with similarly aligned moments tend to form throughout an object. Normally, there are enough different zones with differently oriented magnetic directions to cancel out any net magnetic field. But when you apply an external magnetic field to a piece of iron, the zones that are aligned with the field grow and the ones that are not shrink. This causes a net magnetic field in the iron, and the iron piece is attracted to the magnet. However, under certain parameters such as rubbing the iron on a magnet, applying a strong enough magnetic field, or giving a few really hard whacks (highly scientific term) on another iron object, the magnetic zones will align and cause a net magnetic field, without needing to apply an external field.
Ok, that's cool, but how does temperature affect magnetism? All ferromagnetic materials have a Curie Temperature, above which, the material shows negligible magnetic properties. This occurs because above the Curie Temperature, the thermal energy in the material is so high that the atoms wiggle around quite a bit more, and it's harder for the zones to form. The Curie temperature for iron is 1043 K. This is close to the temperature at which the Austenite (gamma) phase of iron is stable (1183 to 1673 K) but the two properties are not related.
In order to demonstrate this, you could heat a sample of ferritic (alpha) phase iron to about 1100 K, and check and see if it's magnetic. You could also heat a sample of iron to 1200-1600 K, quench it really quickly down to room temperaturre to keep it in the Austenitic phase, and then check to see if it's magnetic as well.
I hope this helps! There's some really great material about magnetism at Encyclopedia Brittanica Online.
Physical Metallurgy Principles, Reza Abbaschian, PWS Publishing Co. Boston, MA
Austenite at Princeton University
Try the links in the MadSci Library for more information on Chemistry.