A process is described for producing cobalt powder having a particle size of about 2 microns or smaller. The process involves two basic operations: Firstly, finely divided cobaltous carbonate is prepared by precipitation from a cobaltous ammine-ammonium sulphate solution by reacting the solution with carbon dioxide. Secondly, the cobalt carbonate precipitate is separated from the solution and is dry-reduced with hydrogen under controlled conditions of time and temperature to produce finely divided elemental cobalt powder. Cobalt powders produced in accordance with the invention are particularly suitable for manufacture of sintered carbide products as well as for use in magnetic products such as magnetic inks and tapes.