The introduction of rare-earth permanent magnets based on samarium-cobalt in about 1970, and neodymium-iron-boron magnets in the mid-nineteen eighties, has ushered in a new era in hard magnetic materials. This has resulted in a dramatic improvement in permanent magnet performance, with neodymium-iron-boron (Nd2Fe14B) magnets having a magnetic energy product up to an order of magnitude greater than those of Alnico and ferrite magnets, with high remanence and coercive force. The search for new permanent magnet materials has led to further interest in rare-earth-iron intermetallic compounds modified by the introduction of interstitial atoms such as nitrogen or carbon. We discuss 'What makes a good permanent magnet', in the context of the crystal structure and the magnetic properties of rare-earth-iron intermetallic alloys that are candidates for new permanent magnet materials. The methods for producing these new candidate magnet materials, including are-melting under an atmosphere of argon, high-energy ball-milling (HEBM), mechanical alloying, melt-spinning and HDDR (hydrogenation, disproportionation, desorption, recombination) are reviewed. Examples of high efficiency electric motors, which use rare-earth permanent magnets, developed by the School of Electrical Engineering, University of Technology, Sydney, and the CSIRO Division of Telecommunications and Industrial Physics are given.