PURPOSE: To obtain the permanent magnet alloy having high C concn., coated with an oxidation-resistant protective film and having high magnetic characteristics by subjecting the powder obtd. from the molten metal of an R-Fe-B-C series alloy stock to heat treatment under specified conditions and executing compacting and sintering.

CONSTITUTION: The molten metal of a alloy stock of an R-Fe-B-C series (R denotes at least one kind among rare earth elements including Y) is refined. From the molten metal, powder is directly formed, or the molten metal is cast into an alloy ingot and is pulverized into alloy powder. At this time, the alloy ingot or the powder is subjected to heat treatment at 500 to 1100°C for ≥0.5hr. The obtd. powder is compacted and sintered. In this way, the permanent magnet alloy excellent in oxidation resistance, hard to rust and having good magnetic characteristics can be obtd.