A carbothermic reduction method is provided for reducing a rare earth element-containing oxide including at least one of neodymium (Nd) and praseodymium (Pr) and possibly other rare earth elements (La, Ce, Sm, Eu, Gd, Tb, Dy, Ho, Er, Tm, Yb, Lu, Sc, and Y) as alloying agents in the presence of carbon and a source of a reactant element including one or more of silicon, germanium, tin, lead, arsenic, antimony and bismuth to form a rare earth element-containing intermediate alloy as a master alloy for making permanent magnet material. The process is a more efficient, lower cost and environmentally friendly technology than current methods of manufacturing rare earth metals. The intermediate material is useful as a master alloy for making a permanent magnet material comprising at least one of neodymium and praseodymium, and possibly other rare earth metals as alloying additives.
CONTRACTUAL ORIGIN OF THE INVENTION
 This invention was made with government support under Contract No. DE-AC02-07CH11358 awarded by the Department of Energy. The Government has certain rights in the invention.