The present invention provides a method of producing a metal composite material by dissolving at least one inorganic metal salt of Mo and/or W optionally together with one or more organic iron group metal salts in water and possibly at least another polar solvent, complex binding the metals with at least one complex former comprising functional groups in the form of OH or NR3, (R=H or alkyl). The amount of said salt of Mo and/or W in the solution should be no more than 4 x 10 x (wt% H2O) g/100 ml solution and not less than 10 wt-% water. The method further includes adding hard constituent powder to the solution, evaporating the solvent and heat treating the remaining powder in an inert and/or reducing atmosphere. As a result coated hard constituent powder is obtained which after addition of pressing agent and optionally with other coated hard constituent powders and/or carbon to obtain the desired composition can be compacted and sintered according to standard practice.