PURPOSE: To produce a composite material which is light in weight and has excellent toughness and heat insulating properties by mixing slurry consisting essentially of forsterite with slurry consisting essentially of iron powder to granules then molding the granules under compression and sintering the molding in a nonoxidative atmosphere.

CONSTITUTION: Water and a dispersant are added to a powdery mixture of forsterite or an Mg compd. and an Si compd., and these are mixed and ground to slurry. Separately, a polyvinyl butyral resin as a binder for paticles and isopropyl alcohol as a solvent are added to powder of iron and these are mixed and ground to slurry. Both slurries are mixed and dispersed, and are granulated with a spray dryer of a high speed heated rotary disc. The granules are molded by compression and the molding is sintered in a nonoxidative atmosphere at 1,300W1,400°C. A composite materal which consists of forsterite internally and iron films externally,has specific gravity as small as about 4, and has toughness equal to general steel materials and excellent heat insulating properties is obtained.