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Japan’s oldest steel mill is venturing into recycling the industrial metal to tackle climate change and survive a race with Chinese mills.

Nippon Steel Corp. has been making steel from mined iron and coal in blast furnaces for more than a century. But as competition heats up, President Eiji Hashimoto called on his staff last month to examine an alternative process that recycles steel from scrap in an electric-arc furnace to cut costs and help it expand in emerging Asian economies.

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