Metal-bonded magnetic composites (MBMCs) present a promising alternative to dense sintered magnets, particularly for intricate components. Compared to polymer-based bonded magnets, MBMCs have wider applicability in harsh environments. In this paper, we demonstrate a solid-state shear-based manufacturing technique to introduce localized magnetization into a paramagnetic aluminum matrix by embedding SmCo5 permanent magnet particles. Our magnetic composites display hard magnetic behavior with a coercivity of 13 kOe and a remanent magnetization of 4.32 emu/g. In addition to magnetization, we also report a 9% improvement in Young’s modulus. Despite the local temperature rise during processing, the magnetic phases didn’t decompose into unwanted phases, preserving the composite’s hard magnetic properties. Creation of an interfacial metallurgical bond with the matrix ensured the suitability of the composites for structural applications. Our study investigates the mechanical, and functional properties of composites, paving the way for lightweight structural magnetic composites with a transformative potential in the aerospace, nuclear, and automotive applications. This work underscores the potential for further optimization and development to drive innovations in magnet and equipment design. Graphical abstract: (Figure presented.)