Abstract: A permanently magnetizable composite is made from rare earth permanent magnet material by incorporating coarse particles of the material into a workable binder at a gradual rate such that sparking and combustion are avoided, until the particles are coated with or embedded in the binder, and then working the mixture under shearing forces sufficient to break up the particles in situ, thereby forming much finer particles directly within the binder. Extremely high particle packing fractions can be obtained in this manner, yet the residual induction of even an isotropic composite substantially exceeds the maximum that would be expected for a magnet having that packing fraction.