The main objective of the present work was to determine a high-alloy Cu-Sn-Ni steel powder preparation conditions and as-consolidated properties of the material in view of its application as a matrix in metal-bonded diamond tools. A mixture of three commercial powders was subjected to ball milling for 30, 60 and 120 hours and then consolidated by the hot-press route. The sintered specimens were tested for density, hardness and oxygen content, and subjected to static tensile test, dilatometric measurements and microstructural observations. The results obtained indicate that the tested material shows relatively high density, hardness and mechanical strength and thus lends itself to manufacturing of diamond-impregnated tool components used for processing of natural stone and ceramics.