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This paper deals with production of hard metal by powder metallurgy and its effect on the environment. Hard metal is a composite material that consists of tungsten carbide as the hard refractory phase and cobalt or nickel as the soft metal binder phase. It cannot be produced by classical casting technology. Owing to its excellent properties, such as high hardness, wear and heat resistance etc., hard metal can be applied in a variety of industrial fields. Powder metallurgy is a technology for production of a wide range of materials as net-shape products from a compacted and sintered powders mixture. In this paper the impact of all stages of hard metal production by powder metallurgy on the environment is analysed. The presented analysis shows that production of hard metal by powder metallurgy has a minimum effect on the environment.