You can estimate permeability of a mixture of high-permeability material (e.g., Fe) with non-permeable binder by considering a toroid of iron with a small (compared with the circumference) air gap.
If the permeability of the iron were infinite, the path through iron = D, and the gap thickness = d, the permeability of the core (for calculating the inductance) would be D/d.
(This is why air-gap inductors have a more constant inductance with respect to current, but lower inductance, compared with non-gapped inductors.)
For the mixture, a gross approximation would use an estimate of the mean path through iron and the mean path through binder (from the material volume ratio), and modify it with the finite permeability of the iron.
If you consider the "magnetization curve" for a permeable material (the curve going from zero excitation to saturation, before entering into a hysteresis cycle), the usual parameters are the "initial permeability" at zero, the "maximum permeability" somewhere up the curve towards saturation, the B value at maximum permeability, and the saturation values of B and H.
The iron powder in Simmed's post is approximately pure iron, not iron oxide. Solid iron has a density of about 7.88 g/cm3, so the powder is about half air by volume at density 3.7.
The two oxides of iron are FeO (wüstite) and Fe2O3 (hematite). The mixture Fe3O4 = FeO . Fe2O3, called magnetite, is a hard magnetic material, more polarizable than the basic oxides, and is the only material found in nature pre-magnetized, leading to the invention of lodestones and magnetic compasses.