Hi....EDM would be the sane way to go as you'd be hacking into hard stuff the other way.....but it " could" be done with carbide I suppose...….I never liked the idea of attempting to cut hardened steel with any cutter and expect to be accurate.
You could try a shrink fit with a steel pulley......that would never move even with dynamite.....very simple and .no need for a keyway then......it is semi permanent though as in very difficult to remove...…. Loctite is another option......much more user friendly......just make the pulley bore length 1-1/2 X the diam for max hold.
Ian.