<PAGE>


                                                                 Exhibit 10.4




                             AMENDMENT NO. 4 TO
               AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

         AMENDMENT dated as of April 30, 1999 by and among Lodestar Energy,
Inc., a Delaware corporation ("Borrower"), Lodestar Holdings, Inc., a
Delaware corporation ("Guarantor"), the financial institutions from time to
time parties to the Loan Agreement (as hereinafter defined) as lenders
(individually, a "Lender" and collectively, the "Lenders"), Congress
Financial Corporation, a Delaware corporation, in its capacity as
administrative agent and collateral agent for the Lenders (in such capacity,
the "Agent") and The CIT Group/Business Credit, Inc., a New York corporation,
in its capacity as co-agent for Lenders (in such capacity, the "Co-Agent").


                             W I T N E S S E T H

         WHEREAS, Agent, Co-Agent, Lenders, Borrower and Guarantor have
entered into financing arrangements pursuant to which Lenders, or Agent on
behalf of Lenders, have made and may make loans and advances and provide
other financial accommodations to Borrower as set forth in the Amended and
Restated Loan and Security Agreement, dated May 15, 1998, by and among Agent,
Co-Agent, Lenders, Borrower and Guarantor, as amended pursuant to Amendment
No. 1 to Amended and Restated Loan and Security Agreement, dated October 22,
1998, Amendment No. 2 to Amended and Restated Loan and Security Agreement,
dated December 21, 1998 and Amendment No. 3 to Amended and Restated Loan and
Security Agreement, dated January 15, 1999 (as amended by this Amendment and
as the same may be further amended, modified, supplemented, extended,
renewed, restated or replaced, the "Loan Agreement") and the agreements,
documents and instruments at any time executed and/or delivered in connection
therewith or related thereto (collectively, together with the Loan Agreement,
the "Financing Agreements");

         WHEREAS, Borrower has requested that Lenders and Agent agree to an
amendment to the Loan Agreement;

         NOW, THEREFORE, in consideration of the mutual conditions and
agreements and covenants set forth herein, and for other good and valuable
consideration, the adequacy and sufficiency of which is hereby acknowledged,
the parties hereto agree as follows:

         1.   INTERPRETATION. For purposes of this Amendment, all terms used
herein, including but not limited to, those terms used and/or defined in the
recitals hereto shall have the respective meanings assigned thereto in the
Loan Agreement.

         2.   AMENDMENT.

         2.1  RESTRICTED PAYMENTS.

              (a) Section 7.7(b)(iii)(C) of the Loan Agreement is hereby
deleted in its entirety and replaced with the following:

         "    (C) as of the date of any such payments and after giving effect
         thereto, the aggregate amount of all such payments made subsequent to
         the date hereof shall not exceed the amount equal to fifty (50%)
         percent of: (1) the cumulative Consolidated Net Income of Borrower (or
         if cumulative Consolidated Net Income shall be a loss, minus one
         hundred (100%) percent of such loss) earned subsequent to the date
         hereof and prior to the date the payment occurs (treating such period
         as a single accounting period) minus (2) all payments made to Guarantor
         by Borrower pursuant to Section 7.7(b)(x) below for federal, state and
         local income taxes based on the taxable income of the immediately
         preceding fiscal year, and"

                  (b) Section 7.7(b)(ix) of the Loan Agreement is hereby
deleted in its entirety and replaced with the following:


<PAGE>

         "    (ix) Borrower may make payments to Guarantor or to Renco Group
         or an affiliate of Renco Group on behalf of Guarantor, itself and its
         Subsidiaries pursuant to the tax sharing agreement between Guarantor,
         Borrower and its Subsidiaries and Renco Group (as in effect on the date
         hereof); provided, that, (A) Borrower, Guarantor and their Subsidiaries
         are included in the consolidated federal income tax return filed by
         Renco Group as to which Borrower is making such payments for the 1998
         tax year or any prior year, or for any taxable period during which
         Borrower, Guarantor and their Subsidiaries join with Renco Group or an
         affiliate of Renco Group in filing any combined or consolidated (or
         similar) state or local income tax return for a jurisdiction which does
         not recognize Borrower, Guarantor and their Subsidiaries as a QSSS (as
         defined in Section 7.7(b)(x) hereof), (B) the payments in any year
         shall not exceed the tax liability that Borrower would have been liable
         for if Borrower had filed its tax returns on a stand-alone basis except
         that Borrower will not have the benefit of any of its tax loss carry
         forwards and any intercompany items shall, for tax liability purposes,
         be recorded on a cash basis rather than on an accrual basis, and
         (C) such payments shall be made by Borrower no earlier than five
         (5) days prior to the date on which Renco Group or an affiliate of
         the Renco Group is required to make its payments to the Internal
         Revenue Service or a state or local jurisdiction described in
         Section 7.7(b)(ix)(A) hereof; and"

              (c) The following is hereby added as a new Section 7.7(b)(x) to
the Loan Agreement:

         "    (x) With respect to any year that Borrower, Guarantor and their
         Subsidiaries have effectively been designated as a qualified
         Subchapter S subsidiary company ("QSSS") under the Code, Borrower may
         pay cash dividends to Guarantor, from legally available funds
         therefor, to the extent taxable income of Borrower is required to be
         included in the taxable income shown by Renco Group as reported in
         its subchapter S tax returns ("Form 1120S"), subject to the
         following:

              (A) Such cash dividends shall be with respect to any such
         period, in an amount up to the product of (1) the taxable income of
         Borrower and its Subsidiaries for such period which is the basis for
         Renco Group being required to include such taxable income in its Form
         1120S, as amended or modified or determined by audit, and the required
         estimated taxable income related thereto and the comparable state and
         local taxable income reports and estimated taxable income, multiplied
         by (2) the corporate Federal, State and local tax rates, whether
         calculated on regular taxable income or alternative minimum taxable
         income, as applicable, in effect for the taxable period applicable to
         Borrower and its Subsidiaries using the rates that would be applicable
         if Borrower was not a QSSS and calculated in accordance with the tax
         sharing arrangement by and among Guarantor, Borrower and its
         Subsidiaries and Renco Group (as in effect on the date hereof),

             (B) Borrower may pay such cash dividends to Guarantor with
         respect to any such period so long as (1) in such period, Borrower,
         Guarantor and their Subsidiaries are effectively designated a QSSS,
         (2) the product of the taxable income of Borrower and its
         Subsidiaries for such period multiplied by the applicable tax rates
         as described above shall be reduced by any applicable tax credits or
         deductions calculated in accordance with the tax sharing arrangement
         by and among Guarantor, Borrower and its Subsidiaries and Renco
         Group (as in effect on the date hereof) available to Borrower and
         its Subsidiaries which would reduce the amount of the income taxes
         payable by Borrower and its Subsidiaries, (3) any such dividends
         shall be paid no more than five (5) days prior to the date that
         Renco Group's shareholders are required to make payment of the taxes
         based on the taxable income of Borrower and its Subsidiaries,
         (4) not less than five (5) days prior to the payment of any such
         dividends, Agent shall have received a certificate signed by the
         chief financial officer of Borrower, in form and substance
         satisfactory to Agent, stating the calculation of the amount which
         is the basis for tax distributions permitted hereunder through such
         period (if any) and providing full information and computations with
         respect thereto and (5) such dividend shall not be in violation of
         applicable law or any other agreement to which Borrower is a party
         or by which Borrower or its assets are bound, and

              (C) In no event shall dividends be paid to Guarantor based on
         taxable income of Borrower and its Subsidiaries for jurisdictions
         which do not recognize Borrower and its
<PAGE>

         Subsidiaries as a QSSS and where (1) Borrower and its Subsidiaries
         are required to file and pay their individual taxes, and (2) where
         Renco Group is not required to pay, or by virtue of a consolidated
         (or similar) return does not make payments in respect of, the tax
         liabilities of the Borrower or any of its Subsidiaries in such
         jurisdictions;"

         2.2  CONSOLIDATED NET WORTH. Sections 7.10(b), (c) and (d) of the
Loan Agreement are hereby deleted in their entirety and the following
substituted therefor:

<TABLE>

         <S>                                   <C>
         "(b) On and after October 30, 1998        ($56,000,000)
              and all times thereafter"

</TABLE>

         3.   REPRESENTATIONS, WARRANTIES AND COVENANTS. In addition to the
continuing representations, warranties and covenants heretofore or hereafter
made by Borrower to Lenders and Agent pursuant to the other Financing
Agreements, Borrower hereby represents, warrants and covenants with and to
Lenders and Agent as follows (which representations, warranties and covenants
are continuing and shall survive the execution and delivery hereof and shall
be incorporated into and made a part of the Financing Agreements):

         3.1  NO DEFAULT. No Event of Default exists on the date of this
Amendment (after giving effect to the Amendment to the Loan Agreement made by
the Amendment).

         3.2  CORPORATE POWER AND AUTHORITY. This Amendment has been duly
executed and delivered by Borrower and is in full force and effect as of the
date hereof and the agreements and obligations of Borrower contained herein
constitute legal, valid and binding obligations of Borrower enforceable
against Borrower in accordance with their respective terms.

         4.   FEE. In consideration of the Amendment set forth herein,
Borrower shall on the date hereof, pay to Lenders, and Lenders may, at their
option, charge the account of Borrower maintained by Lenders, a fee in the
amount of $25,000, which fee is fully earned and payable as of the date
hereof and shall constitute part of the Obligations.

         5.   EFFECT OF THIS AMENDMENT. Except as modified pursuant hereto,
no other waivers, changes or modifications to the Financing Agreements are
intended or implied, and in all other respects, the Financing Agreements are
hereby specifically ratified, restated and confirmed by all parties hereto as
of the effective date hereof. To the extent of conflict between the terms of
this Amendment and the other Financing Agreements, the terms of this
Amendment shall control.

         6.   FURTHER ASSURANCES. The parties hereto shall execute and
deliver such additional documents and take such additional actions as may be
necessary to effectuate the provisions and purposes of this Amendment.

         7.   GOVERNING LAW. The rights and obligations hereunder of each of
the parties hereto shall be governed by and interpreted and determined in
accordance with the laws of the State of New York.

         8.   BINDING EFFECT. This Amendment shall be binding upon and inure
to the benefit of each of the parties hereto and their respective successors
and assigns. Any acknowledgment or consent contained herein shall not be
construed to constitute a consent to any other or further action by Borrower
or to entitle Borrower to any other consent. The Loan Agreement and this
Amendment shall be read and construed as one agreement.

         9.   COUNTERPARTS. This Amendment may be executed in any number of
counterparts, but all of such counterparts shall together constitute but one
and the same agreement. In making proof of this Amendment, it shall not be
necessary to produce or account for more than one counterpart thereof signed
by each of the parties thereto.

         IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their authorized officers as of the date and year
first above written.


<PAGE>


                                           Very truly yours,

                                           LODESTAR ENERGY, INC.

                                           By:  /s/ Roger Fay
                                               --------------------------------
                                           Title:  Vice President
                                                  -----------------------------


                                           LODESTAR HOLDINGS, INC.

                                           By:  /s/ Roger Fay
                                               --------------------------------
                                           Title:  Vice President
                                                  -----------------------------


AGENT:

CONGRESS FINANCIAL CORPORATION, for
itself and as Agent

By:  /s/ Lawrence S. Forte
    ------------------------------------
Title:  First Vice President
       ---------------------------------


THE CIT GROUP/BUSINESS CREDIT, INC., for
itself and as Agent

By:  /s/ Christopher Hill
    ------------------------------------
Title:  Assistant Vice President
       ---------------------------------