Hydriding combustion synthesis (HCS), which utilizes self-propagating exothermic reaction between metallic powders at pressurized hydrogen, was originally developed for metal hydride production. It offers many advantages to save processing time, to reduce productive cost, and to synthesize high purity product. In this paper, a feasibility study of HCS was conducted by means of enthalpy-exergy diagram, in which Mg2NiH4 was selected as the final product. We estimated the exergy losses of two metal hydride production systems: One was HCS, and the other was conventional method composed of a melting process and so-called activation treatment. As a result, the total exergy loss (EXL) of HCS was found to be 230 kJ/mol-Mg2NiH4, which is less than 11% of EXL in the conventional method. This difference between EXLs of the systems was due to the activation treatment in the conventional method, where cast Mg2Ni was repeatedly hydrogenated and dehydrogenated. Since ingot metal hydrides require activation treatment, the conventional method becomes quite inefficient. On the other hand, the HCS product does not require the activation treatment, thus, it is quite attractive from the viewpoint of cost efficiency.