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                               ADVISORY AGREEMENT


         ADVISORY AGREEMENT (the "Agreement") dated as of July 1, 2000, by and
between Metallurg, Inc. ("MI"), a Delaware corporation with an office at 6 East
43rd Street, New York, New York 10017, and Safeguard International Management
LLC ("Safeguard"), a Delaware limited liability company with an office at 800
The Safeguard Building, 435 Devon Park Drive, Wayne, Pennsylvania 19089.

         WHEREAS, Safeguard has provided certain services to MI in connection
with the structuring and consummation of the transactions provided for under
that certain Agreement and Plan of Merger, dated as of June 15, 1998 (the
"Merger Agreement") by and among Metallurg Holdings, Inc., MI and Metallurg
Acquisition Corp., a Delaware corporation.

         WHEREAS, Safeguard has continued, and will continue, to provide certain
advisory and other services to MI after the consummation of the transactions
contemplated by the Merger Agreement with respect to MI's structure, its
operations and other matters;

         WHEREAS, Safeguard will incur certain expenses with respect to the
continuing provision of such services, including but not limited to costs
incurred by Safeguard with respect to Safeguard employees being assigned to MI.

         NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the parties agree as follows:

         1.       Responsibility of Safeguard

         Safeguard shall provide to MI certain information and services related
to MI's business and affairs as required. Such information and services shall
include, without limitation, evaluation and interpretation of financial and
industry data, preparation of reports concerning financial and structuring
strategies and alternatives, strategic planning, identification of acquisition
candidates, assistance in obtaining financing, assistance in arranging credit
facilities and loans from banks, introduction to capital sources and provision
of Safeguard employees to MI as required.

         2.       Advisory Fee; Expenses

         In consideration of the benefits and services MI shall receive
hereunder, during the term hereof, MI shall pay to Safeguard an advisory fee
(the "Advisory Fee") of $15,000 per month, payable within five business days
after the end of each calendar quarter, commencing July 1, 2000.

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         3.       Term

         This Agreement shall commence on the date first above written and shall
terminate at any time upon the giving of written notice 30 days in advance by
one party to the other of its desire to terminate the Agreement; provided,
however, that such termination shall not relieve MI of its obligation to pay any
fees which had accrued but not yet been paid to Safeguard prior to such
termination.

         4.       Notices

         Notice to be given to the parties hereunder shall be in writing and
shall be deemed given upon personal delivery to an officer of a party or two
business days after being mailed, postage prepaid, by United States certified
mail, return receipt requested to the address of the respective parties set
forth on the first page hereof. Either party hereto may designate a new address
at any time by notifying the other party in the manner set forth above.

         5.       Modification

         This Agreement contains the entire agreement of the parties with
respect to the subject matter hereof. Any change, modification, amendment or
alteration to this Agreement shall be effected only in writing and signed by the
party or parties against whom enforcement of any such change, modification,
amendment or alteration is sought.

         6.       Nonwaiver

         The failure of any party hereto, at any time, to require performance by
any party hereto of any provision hereof shall in no way affect the right of
such failing party hereafter to enforce such provision not shall any waiver by
any party of any breach of any provisions hereof be taken or held to be a waiver
of any succeeding breach of such provision or as a waiver of the provision
itself.

         7.       Severability

         If any provision or provisions of this Agreement is held to be invalid
or unenforceable, such provision shall be automatically reformed and construed
so as to be valid, operative and enforceable to the maximum extent permitted by
law or equity while most nearly preserving its original intent. The invalidity
of any part of this Agreement shall not render invalid the remaining provisions
of this Agreement and, to that extent, the provisions of this Agreement shall be
deemed to be severable.

         8.       Headings

         The headings of this Agreement are inserted for convenience only and
shall not be considered in construction of the provisions hereof.

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         9.       Assignment and Successors; Binding Effect, etc.,

         The rights and obligations of Safeguard and MI under this Agreement
shall inure to the benefit of and shall be binding upon the successors of
Safeguard and MI and may not be assigned or delegated without the prior written
consent of the other party hereto, and any such purported assignment or
delegation shall be null and void.

         10.      Governing Law

         The terms of this Agreement shall be governed by and construed in
accordance with the laws of the State of New York without regard to principles
of conflicts of law.

         11.      Counterparts

         This Agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
June 8, 2000, effective as of July 1, 2000.





                                       Metallurg, Inc.

                                       By:    /s/ Barry C. Nuss
                                           -----------------------------------
                                           Name: Barry C. Nuss
                                           Title:  Vice President, Finance and
                                                   Chief Financial Officer


                                       Safeguard International Management, LLC

                                       By:    /s/ Arthur R. Spector
                                           -----------------------------------
                                           Name: Arthur R. Spector
                                           Title: Managing Director