P-type $eta$-FeSi$_2$ with a nominal composition of $Fe_{0.92}Mn_{0.08}Si_2$ powders has been produced by mechanical alloying process. As-milled powders were spray dried and consolidated by atmospheric plasma thermal spraying as a rapid sintering process. As-milled powders were of metastable state and fully transformed to $eta$-$FeSi_2$ phase by subsequent isothermal annealing. However, as-thermal sprayed $Fe_{0.92}Mn_{0.08}Si_2$ consisted of untransformed mixture of $alpha$-$Fe_2Si_{5}$ and $varepsilon$-FeSi phases. Isothermal annealing has been carried out to induce transformation to the thermoelectric semiconducting $eta$-$FeSi_2$ phase. Isothermal annealing at $845^{circ}C$ in vacuum gradually led to the thermoelectric semiconducting $eta$-$FeSi_2$ phase transformation, but some residual metallic $alpha$ and $varepsilon$ phases were unavoidable even after prolonged annealing. Thermoelectric properties of $eta$-$FeSi_2$ materials before and after isothermal annealing were evaluated. Seebeck coefficient increased and electric conductivity decreased with increasing annealing time due to the phase transition from metallic phases to semiconducting phases. Thermoelectric properties showed gradual increment, but overall properties appeared to be inferior to those of vacuum hot pressed specimens.