the usage of "than that of"

Consider a few possible ways of saying this.

1 ... magnitude of A is lower than B [this would be correct only if B possessed a magnitude in the same way as A does]

2 ... magnitude of A is lower than that of B [correct because "that" refers to the previous mention of magnitude]. This your suggestion and it is correct and concise.

3 ... magnitude of A is lower than the magnitude of B is. [correct but the "is" is not really needed. It adds nothing to 2.]

4 ... magnitude of A is lower than is the magnitude of B. [a more awkward way of saying 3.]

Not only does 4 add nothing to 2 but it may also confuse because it could be taken to say ... magnitude of A is lower than "the magnitude of B is lower". Without anything with which B can be compared, this becomes meaningless.