A new three-dimensional (3D) MT modeling scheme conserving electric current and magnetic flux is developed. The scheme is based on finite difference (FD) staggered rectangular non-uniform grid formulation for the secondary electric field with continuous components of tangential electric and normal magnetic fields, in contrast to existing FD algorithms with a discontinuous E-field at the face of the cells. The scheme leads to a sparse 13-band complex symmetrical system of linear equations, which is effectively solved by fast and stable conjugate gradient (CG) methods. The preconditioning procedure was used to decrease the condition of a number of an ill-conditioned matrix system by several orders and stably and quickly solves the matrix system. The special module for the correction of divergence-free current J greatly increased the speed of convergence and accuracy, especially at low frequencies and for high-contrast resistivity or conductivity structures. A special procedure was developed to improve the accuracy of tangential magnetic and vertical electrical components at the Earth's surface and at the interface with a large conductivity contrast. The validity of the new algorithm was demonstrated for difficult models with high-contrast resistivity structures including topography and for COMMEMI project models.
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