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Dilute magnetic impurities in a disordered Fermi liquid are considered close to the Anderson metal-insulator transition (AMIT). Critical Power law correlations between electron wave functions at different energies in the vicinity of the AMIT result in the formation of pseudogaps of the local density of states. Magnetic impurities can remain unscreened at such sites. We determine the density of the resulting free magnetic moments in the zero temperature limit. While it is finite on the insulating side of the AMIT, it vanishes at the AMIT, and decays with a power law as function of the distance to the AMIT. Since the fluctuating spins of these free magnetic moments break the time reversal symmetry of the conduction electrons, we find a shift of the AMIT, and the appearance of a semimetal phase. The distribution function of the Kondo temperature $T_{K}$ is derived at the AMIT, in the metallic phase and in the insulator phase. This allows us to find the quantum phase diagram in an external magnetic field $B$ and at finite temperature $T$. We calculate the resulting magnetic susceptibility, the specific heat, and the spin relaxation rate as function of temperature. We find a phase diagr
preprint / 2012