PURPOSE: To efficiently remove oil from mill scale by subjecting a mill scale slurry contg. a specific ratio of an oil-component to high shearing stirring in a water-in-oil emulsion to form dilute oil mill scale and an oily water emulsion.

CONSTITUTION: The mill scale is collected and the oil amt. thereof is analyzed. An aq. mill scale slurry having a solid content of ≥25 wt.% is then prepd. by slurrying a part of ≥0.5 wt.% oil-contg. mill scale in water. The aq. mill scale slurry is subjected to high shearing stirring to suspend the dilute oil mill scale and, thereafter, the dilute oil mill scale is subjected to a phase sepn. to form the dilute oil mill scale and the oily water emulsion. Next, the dilute oil mill scale is rinsed with fresh water to form the oil-less mill scale and waste washing water. The waste washing water is recirculated for the purpose of preparing the aq. mill scale slurry.