A method of forming a composite overlay compound on a substrate includes forming a mixture including at least one component from a first group of component materials including titanium, chrome, tungsten, vanadium, niobium, and molybdenum. The mixture also includes at least one component from a second group of component materials including carbon and boron, and the mixture further includes at least one component from a third group of component materials including silicon, nickel, and manganese. The mixture of selected component materials is then applied to a substrate material to form an overlay compound on the substrate material. The overlay compound is fused to the substrate to form a metallurgical bond between the substrate material and the overlay compound.