Wikipedia
Mill scale, often shortened to just scale, is the flaky surface of hot rolled steel, consisting of the iron oxides iron(II) oxide (FeO), iron(III) oxide (FeO), and iron(II,III) oxide (FeO, magnetite).
Mill scale is formed on the outer surfaces of plates, sheets or profiles when they are being produced by rolling red hot iron or steel billets in rolling mills. Mill scale is composed of iron oxides mostly ferric and is bluish black in color. It is usually less than thick and initially adheres to the steel surface and protects it from atmospheric corrosion provided no break occurs in this coating.
Because it is electro-chemically cathodic to steel, any break in the mill scale coating will cause accelerated corrosion of steel exposed at the break. Mill scale is thus a boon for a while until its coating breaks due to handling of the steel product or due to any other mechanical cause.
Mill scale is a nuisance when the steel is to be processed. Any paint applied over it is wasted, since it will come off with the scale as moisture-laden air gets under it. Thus mill scale can be removed from steel surfaces by flame cleaning, pickling, or abrasive blasting, which are all tedious operations that waste energy. This is why shipbuilders used to leave steel delivered freshly rolled from mills out in the open to allow it to 'weather' until most of the scale fell off due to atmospheric action. Nowadays most steel mills can supply their produce with mill scale removed and steel coated with shop primers over which welding can be done safely.
Mill scale generated in rolling mills will be collected and sent to a sinter plant for recycling.