A method of manufacturing a sputtering target

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An ingot is made from a used target of 30 weight % or more, and new metals of the same components, and recycled alloy powder is made by a gas atomizing process. Magnetic permeability is controlled not to exceed 2 by adjusting the content of rare earth metals in rare earth alloy powder to be at least 35 weight %. By blending the recycled alloy powder with other powder to produce alloy powder containing at least 50 weight % of rare earth alloy powder having a magnetic permeability not higher than 2 and containing at least 65 weight % of rare earth alloy powder. By sintering the alloy powder under pressure and thereafter cutting top, bottom and side surfaces of the sintered material, a target having a magnetic permeability not higher than 2 and having a thickness not less than 8 mm is fabricated.