Fe-Cu-Co is a structural component used in applications requiring both high strength and high hardness. A diamond cutting tool with iron -based (Fe -53%, Cu – 28%, Co -17%, P– 1% & Ni -1%) pre-alloyed powders was prepared in the laboratory using powder metallurgy technique. Commercially available pure powders were combined to create the alloys, which were then roll compacted into bars and right away hot processed into fully dense alloy bars. Solid state sintering technique is used to manufacture composite material as it gives less defectives, more accurate than casting and excellent dimensional control. During sintering process metal powders are blended in ball milling and are compacted on hot press machine by applying heat and pressure simultaneously at different elevated temperatures. The sintered specimens are subjected to hardness, impact, density and porosity tests along with fractography study. From experimental observations it is found that material has high hardness than the steel, which can withstand mechanical vibrations, high impact strength and high toughness. According to experimental results it is most suitable for cutting applications, and there is a possibility to add diamond crystals in this tool, to strengthen hardness helping to cut the rocks.