A Mg-based composite material has been produced by the consolidation at room temperature of a Mg-5wt.% Ni-2wt.% Nb2O5 powder mixture subjected to high-pressure torsion (HPT), one of the processing methods to induce severe plastic deformations. The microstructure, density, and microhardness of the consolidated disks were characterized after the application of up to 30 revolutions in torsion under compression stresses of 3 and 5 GPa. According to the density measurements, the composite was consolidated in full after the application of five revolutions, although disks subjected to only one revolution exhibited densities close to the maximum measured value. On the other hand, grain size and microhardness measurements showed that differences existed at locations near the center and the periphery of the HPT-processed disks. Under the stress of 5 GPa, the grain size in the central regions stabilized at about 0.35 μm after five revolutions, while at the peripherical regions it gradually decreased with an increasing number of revolutions down to about 0.15 μm after 30 revolutions. In turn, the microhardness measured along a diametral cross section steadily increased with the number of revolutions between 1 and 10 revolutions, maintaining a gradient from the center to the periphery in all cases. With the application of 20 and 30 revolutions, only the peripheral regions increased considerably in hardness. It was discovered that the magnesium particles in the initial powder mixture had formed an oxide—hydroxide surface layer, which changed the expected final density of the consolidated material by about 2 to 4.5%. This superficial contamination of the Mg powders did not prevent the material from achieving full consolidation.