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Starting from commercial MgB2 325 mesh powder, we further reduced the agglomerates by attrition milling in nitrogen atmosphere to minimize oxidation. The milling time was varied between 10 and 40 hours, using two different types of milling media: yttria stabilized zirconia and CW balls. We studied the influence of milling time and milling media on the broadening of x-ray diffraction peaks and the superconducting properties of the powders. A highly energetic milling markedly decreased the crystallite size but damaged the superconducting properties. We observed a decrease of the Tc, consistent with the observed crystallinity loss. We prepared tapes with the 40-hours-milled powders and analyzed the resulting microstructures when using a soft (silver) and a hard (stainless steel) metal sheath, heat treated for 1 hour at 615degC in argon. This temperature was chosen after observing the existing reactions between magnesium diboride and silver by DTA analysis of the powders, so as to minimize the reaction at the superconductor-silver interface. We characterized the superconducting properties by determining the magnetic Jc in a SQUID. We performed 4-point bending micro-tests on the tapes to evaluate their mechanical strength.