My machinery customers talk about their chips all the time. Spinners, briquetters, getting the oil out so they can sell it. But the scrap yard still doesn’t care what grade it is. It pays them very little for steel scrap and nothing for sludge from grinding operations.

Kazuhiko Nishioka, co-founder and CEO of Sun Metalon, came up with a product that gets the last of the oil out of those chips, even the sludge, and turns them into clean pucks a mill will pay real money for.

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A steel mill that fits in a box

Metal runs in Kazu Nishioka’s family. His father worked at Nippon Steel, and his grandfather ran a machine shop.

At 21, Kazu spent two months volunteering at an orphanage in East Africa. He left convinced that real change meant helping people build their own industry, but infrastructure takes generations to build.

He earned a master’s at the University of Tokyo and spent the next 11 years at Nippon Steel specializing in heating. When he started thinking about what came next, he decided he wanted to do something good for Africa. Years had passed since that trip, but it had stayed with him.

A month or two later, he was on a plane reading a history of iron making. On the last page was a photo of a professor heating metal with electromagnetic energy, using a setup small enough to fit on a table. As soon as he landed, he called a friend: could they fit an entire steel mill into a box? His friend said, why not? He became Kazu’s co-founder.

A steel mill is basically one giant heating operation, so if you can shrink the heat, you can shrink the mill. Kazu imagined three boxes, one each for iron making, metal 3D printing, and recycling. With a solar panel, you could start a metal industry almost anywhere.

He founded Sun Metalon in 2021 and spent two years on 3D printing. By 2023, recycling alone was clearly a big enough market, so he went all in. Sun Metalon is a US company with operations in Yokohama and Chicago, where Kazu earned his PhD at Northwestern.

Squeezing out the last of the oil

The process starts with briquetting, compressing chips into a puck. But even after a centrifuge, that puck still holds 1-2% cutting fluid, and mills don’t want it. In the melt, fluid can cause fires and explosions, and it leaves impurities in the finished metal. Sun Metalon’s patented heating process removes what’s left. The result is a pure, certified puck, the most valuable form of scrap there is. It handles oil or water-based coolant, though Kazu says water-based is faster.

1,000 grades of steel, five piles of scrap

Nippon Steel makes nearly 1,000 grades of steel. Once those grades become chips, the scrap market lumps them into about five categories. Keeping them separate costs money, and cutting fluid drags the price down anyway, so there’s been no reason to try.

Sun Metalon gives shops that reason. Sorted, clean chips are worth more, and Sun Metalon pays more for them than a scrap yard would, then finds the right buyer for each metal. Kazu says some shops could raise their profit by as much as 10%.

Sludge: from landfill to foundry

Grinding sludge, the fine metal particles from grinding mixed with coolant, has always been a dead end. Komatsu was paying to landfill sludge from one of its foundries. Sun Metalon sold them a machine that turns that sludge into pucks the foundry melts right back down. As Kazu puts it, negative value becomes positive value.

What your chips could be worth

A foundry makes scrap and melts metal in the same place, so a machine on site makes sense. Sun Metalon is now expanding into machine shops. They pick up chips sorted by alloy, process them in their own plant, and sell the pucks to metal makers. If a shop has been mixing grades, they help set up a better system, usually just a few extra bins. The best fits are shops running copper, aluminum, or steel, and anyone doing heavy grinding on gears, bearings, crankshafts, or brake discs.

Governments are paying attention too. Japan exports about 7 million tons of steel scrap a year, and the Japanese government is funding Sun Metalon to help keep that metal at home. In Europe, new end-of-life vehicle rules are pushing automakers to use more recycled material.

Less metal in landfills, less shipped overseas, and more money for the shops that made it. Kazu is starting with scrap, but he’s building toward something much bigger.