My personal opinion is that it reacts with magnesium oxide and thus recovers the surface of magnesium.
I've heard this before from other people, but I've never heard an explanation for how this would actually happen. I don't see how an oxidizing agent (I
2) would react with oxidized Mg(II), especially when there is perfectly good Mg(0) around. Does anyone have any insight into this?
Also, as for grinding the Mg, certainly surface area helps, but heating the mortar only solves the H
2O part of the problem. What about the O
2? That reacts with Mg(0) just as fast! I think that is why most people I know prefer to use Mg turnings in favor of Mg powder. The powder ends up being all oxide, while in the turnings the part below the surface is protected as Mg(0).