Abstract: A tool is provided for removing ferrous chips, such as those that fall into the interior of a steel pipe when an opening is drilled into the pipe. The tool has a stem arranged so that a rod can be attached to the upper end to manipulate the tool. A magnet is affixed to the lower end of the stem. An inner non-magnetic tubular casing is telescopically received on the stem, the inner casing having a closed end that normally fits against the magnet. An outer tubular non-magnetic casing is telescopically received on the inner casing. A coil spring urges the outer casing downwardly so that the inner casing having the magnet therein is normally received within the lower end of the outer casing, the outer casing being displacable when forced against an object to move the inner casing and magnet therein to attract ferrous chips. After pressure against the outer casing is removed, it telescopically extends over the inner casing and attracted ferrous chips to retain them against dislodgement.