Abstract: A continuous process and system for treatment of oily waste products and heavy sludge resulting from the washing of scrap metal fragments bathed in oil. The sludge and oily waste both include a mixture of water, ferrous containing particulates and a hydrocarbon liquid. The process of this invention includes feeding the heavy sludge and oily waste into an incinerator, incinerating the hydrocarbon liquid contained therein at conditions such that the metal contained therein is recovered as particulate ash, and venting the resulting combustion gases to the atmosphere. The system of this invention includes an incinerator, an auger for transporting heavy sludge from the scrap washer to the incinerator, a pump and storage tank for feeding oily waste from the scrap wash water to the incinerator, and a baghouse for filtering the combustion gases and exhausting them to the atmosphere.