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Due to its availability and high storage capacity, Mg is an ideal material in hydrogen storage applications. In practice, doping Mg/MgH₂ with catalyst(s) is necessary in enhancing the de/rehydrogenation kinetics and minimizing both of decomposition temperature and its related apparent activation energy. The present study proposed a new heterogeneous catalytic agent that consisted of intermetallic compound (ZrNi₅)/metal oxide (Nb₂O₅) binary system for using with different concentrations (5−30 wt%) to improve MgH₂. Doping MgH₂ powders with low concentration (5, 7, 10 wt%) of this new catalytic system led to superior absorption/desorption kinetics, being indexed by the short time that is required to absorb/desorb 4.2−5.6 wt% H₂ within 200 s to 300 s. Increasing the doping dose to 15–30 wt% led to better kinetic effect but a significant decrease in the hydrogen storage capacity was seen. The dependent of apparent activation energy and decomposition temperature of MgH₂ on the concentration of ZrNi₅/Nb₂O₅ has been investigated. They tended to be linearly decreased with increasing the catalyst concentrations. The results elucidated the crucial role of catalytic additives on the disintegration of MgH₂ into ultrafine powders (196 nm to 364 nm diameter). The formation of such nanoparticles enhance the hydrogen diffusion and shorten the time that is required for the hydrogenation/dehydrogenation process. Moreover, this refractory catalytic system acted as a grain growth inhibitor, in which Mg/MgH₂ powders maintained their submicron level during the cycle-life-test that was extended to 100 h at 200 °C.