The possibility of using variously dispersed powders of compacts based on synthetic and natural diamond with carbon binder in grinding wheels for machining hard alloys is studied. The partial (50%) or complete replacement of synthetic diamonds with the compact powders containing diamond grains coated with a superhard shell of Yakut diamond micron powders—the waste of gem-cutting operations—in a carbon binder is shown to provide a significant (more than three-fold) improvement of wear resistance of diamond grinding wheels.