Refurbishment of worn Dies is an interesting research area which also has high economic benefit. Material which is used in PM dies for compacting powders are high carbon steel which have very low weldabilitis. Due to the high hardness, high carbon content and martensitic microstructure, these Dies are very sensitive to the thermal shock produced from fusion welding. For successfully refurbishing the worn Dies, Fine spark deposition was used for deposition of a new layer on the cold work 1.2436 steel. Different heat inputs were used for deposition of nickel based material and finally microstructure and HAZ were studied. Results show the HAZ area is very narrow, free from cracks and HAZ microstructure is similar to the base metal. GTAW welding using same filler metal induced many cracks in HAZ of weld which is detrimental to the refurbished Die performance. Results show increasing heat input in Fine spark deposition can results in crack formation in HAZ even if the weld pool does not occurred in base metal. However these cracks are much smaller than those occurred in GTAW.