Where does the kinetic energy of a nail placed near a magnetic field come from? Magnetic force is always normal to the velocity of a charge and therefore does not work. An iron nail held near a magnet, when released, increases its kinetic energy as it moves to cling to the magnet. What agency is responsible for this increase in kinetic energy if not the magnetic field?
 A: The work is done by the induced electric field. The magnetic field of the magnet is not uniform, so according to the maxwell laws we have:
$\nabla \times E = - \frac{\partial B}{\partial t}$
And hence this electric field will act over the nail.
A: 
Magnetic force is always normal to the velocity of a charge and therefore does not work.

The nail is not charged (presumably), so you won't find the answer by looking at how test charges move in a magnetic field.
Instead, think of the magnetic field inducing a magnetic dipole into the nail (because iron has very high permeability).  Then look at the energy of a dipole in a magnetic field.  The closer they are aligned, the less potential energy.  It is this potential energy that is available to do work as the nail approaches the magnet.
The potential energy of the aligned dipole and magnet can be considered negative here, rather like the potential energy in a gravitational system.  Energy is released as these systems are assembled from separated parts.
