A method for preparing a steel mill waste material comprised of inner metallic cores encased in outer shells of iron oxides for use as size-graded metallic abrasives and the product so produced are described. The waste material is screened to simultaneously separate it from all the foreign matter collected therewith and also to separate it into a fraction containing particles larger than about 6.35 mm. The fraction containing the larger particles is recycled in the steel mill. The fraction containing the smaller particles is charged into a grinding mill containing appropriate grinding media. The smaller fraction remains in the mill for a time so that the outer shells are broken into small pieces substantially all of which are removed from the surfaces of the inner cores. The pieces of the shells and the metallic cores are separated from each other by screening. The metallic cores are graded into a plurality of sizes by screening. The pieces of shells are recycled in the plant. The metallic cores have a microstructure of untempered lath-like martensite substantially free from intergranular and intragranular cracking, a hardness of about Rc20 to 35, and a grain size of between about 3 and 4 and are characterized by having good impact toughness and extended service life.