Question: I heard that rust is bad for my transformers. I’m being told that rust causes an increase in eddy current losses which will heat up and further damage my transformer. Rusty transformers will also hurt my tone, so I must remove the rust or replace the transformers to make my amp operate properly and extend its life.
Answer: Nothing could be further from the truth. While iron possesses the necessary magnetic properties, it is also electrically conductive. Eddy currents are circulating currents in the core induced by a magnetic field emitted by the energized primary winding of the transformer. These electric currents are undesirable. The coreis acting much like a shorted secondary winding. They are power-robbing losses that convert your guitar playing (input power) into heat that beats up your transformer. This effect is certainly not helping your tone!
On the other hand, rust (iron oxide) is a nonconductor of electric current. The high resistivity of rust reduces eddy current losses. Since iron is also a conductor of electric current and the goal here is to minimize eddy currents, which is why the construction of the core is made up of a stack of thin plates of iron (laminations) which are insulated from each other by an oxide (rust-like) coating. This confines the eddy currents and prevents them from circulating between the laminations. The higher resistance created results in a reduction of power losses within the core.
What’s this mean in plain English? Back in the early years, manufacturers of laminations intentionally exposed their iron to moist air to encourage rust to naturally form on the surfaces as an insulator! Like a fine patina on an antique bronze the rust on your transformer could be viewed as badge of honor. Assuming that your transformer doesn’t have other problems like coil damage from excessive moisture exposure (common with paper bobbins), you can actually expect some improvements in output transformer tone and lower losses in power transformers as rust develops.
If you are still bothered by the cosmetic aspect of rust, never scrape off the rust to the point of exposing bare metal because you will bring back those nasty eddy currents. Instead, brush off the loose particles and re-paint the area with varnish. If you want to send your transformer to Mercury, we can re-dip it in varnish and bake it for a small fee. Transformer evaluations are always no charge providing you cover the shipping costs to and from Mercury.
Source: https://mercurymagnetics.com/pages/_misc/FAQ.htm#Transformer_Rust