I played this now on a simple map playing barbarians.
The basic idea works fine and is not totally unrealistic.
Later in the game you "suddenly" have more metal (but then again lack the coal, well).
I'd suggest to have some variations perhaps:
e.g. Atlanters can enhance a smelting works to add recyling.
The imperials could have recycling as an enhancement of the metal works.
The icon for the scrap metal is already fine for me, we need some
more building pictures of course.
Gun: perhaps a nice idea for R21 while we start to freeze a R20?
Thanks for your nice work.