<PAGE>   1

                                                                       CONFORMED

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington D.C. 20549
                                    FORM 10-Q

                                QUARTERLY REPORT
                         PURSUANT TO SECTION 13 OR 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                For the quarterly period ended September 30, 1999
                          Commission file number 1-228


                                ZEMEX CORPORATION
             (Exact name of registrant as specified in its charter)


             CANADA                                       NONE
  (State or other jurisdiction           (I.R.S. Employer identification Number)
of incorporation or organization)

                         CANADA TRUST TOWER, BCE PLACE
                           161 BAY STREET, SUITE 3750
                        TORONTO, ONTARIO, CANADA, M5J 2S1
                    (Address of principal executive offices)


                                 (416) 365-8080
              (Registrant's telephone number, including area code)



           Securities registered pursuant to Section 12(b) of the Act

TORONTO STOCK EXCHANGE/NEW YORK STOCK EXCHANGE       CAPITAL STOCK, NO PAR VALUE


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding twelve months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                      ---------- --------     ------- --------
                          YES       X            NO
                      ---------- --------     ------- --------


As of September 30, 1999, there were 8,847,105 shares of capital stock
outstanding.
<PAGE>   2


                         PART I - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS

                                ZEMEX CORPORATION
                           CONSOLIDATED BALANCE SHEETS
                                      (US$)

<TABLE>
<CAPTION>
---------------------------------------------------------------- -------------------------- --------------------------
                                                                         SEPTEMBER 30, 1999          DECEMBER 31, 1998
---------------------------------------------------------------- -----------------------------------------------------
                                                                           (unaudited)
<S>                                                                      <C>                         <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents                                                      $  708,000                $ 1,062,000
Accounts receivable                                                            21,344,000                 17,642,000
Inventories                                                                    18,823,000                 18,036,000
Prepaid expenses and other                                                      1,505,000                    946,000
Future tax benefits                                                               657,000                    657,000
----------------------------------------------------------------------------------------------------------------------
                                                                               43,037,000                 38,343,000

Property, plant and equipment                                                  95,603,000                 89,058,000
Other assets                                                                   20,377,000                 21,374,000
Future tax benefits (non-current)                                                 538,000                     91,000
----------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS                                                                 $159,555,000               $148,866,000
----------------------------------------------------------------------------------------------------------------------

LIABILITIES
CURRENT LIABILITIES
Bank indebtedness                                                             $ 3,000,000                $10,000,000
Accounts payable                                                                7,944,000                  6,324,000
Accrued liabilities                                                             5,067,000                  4,433,000
Accrued income taxes                                                              967,000                    644,000
Current portion of long term debt                                                 675,000                  2,132,000
----------------------------------------------------------------------------------------------------------------------
                                                                               17,653,000                 23,533,000

LONG TERM DEBT                                                                 50,614,000                 39,354,000
OTHER NON-CURRENT LIABILITIES                                                     589,000                  1,006,000
----------------------------------------------------------------------------------------------------------------------
                                                                               68,856,000                 63,893,000
----------------------------------------------------------------------------------------------------------------------
NON-CONTROLLING INTEREST                                                        3,035,000                  3,075,000
----------------------------------------------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY
Common stock                                                                    8,847,000                  8,708,000
Paid-in capital                                                                49,234,000                 48,691,000
Retained earnings                                                              33,101,000                 28,418,000
Note receivable from shareholder                                               (1,749,000)                (1,749,000)
Cumulative translation adjustment                                              (1,769,000)                (2,170,000)
----------------------------------------------------------------------------------------------------------------------
                                                                               87,664,000                 81,898,000
----------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                   $159,555,000               $148,866,000
----------------------------------------------------------------------------------------------------------------------
</TABLE>

                                      -1-
<PAGE>   3


                                ZEMEX CORPORATION
                        CONSOLIDATED STATEMENTS OF INCOME
                                      (US$)
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------
                                                               THREE MONTHS ENDED                  NINE MONTHS ENDED
                                                                  SEPTEMBER 30                        SEPTEMBER 30
                                                            1999               1998               1999               1998
--------------------------------------------------------------------------------------------------------------------------
                                                                              (unaudited)
<S>                                                  <C>                <C>                <C>                <C>
NET SALES
Industrial minerals                                  $12,824,000        $10,336,000        $38,116,000        $33,384,000
Metal powders                                          9,659,000          8,782,000         28,732,000         27,120,000
Aluminum recycling                                     7,291,000          6,559,000         20,337,000         17,552,000
--------------------------------------------------------------------------------------------------------------------------
                                                      29,774,000         25,677,000         87,185,000         78,056,000
--------------------------------------------------------------------------------------------------------------------------
COSTS AND EXPENSES
Cost of goods sold                                    20,474,000         18,130,000         60,115,000         55,594,000
Selling, general and administrative                    3,566,000          2,881,000         10,877,000          9,742,000
Depreciation, depletion and amortization               2,226,000          1,562,000          6,521,000          4,824,000
--------------------------------------------------------------------------------------------------------------------------
                                                      26,266,000         22,573,000         77,513,000         70,160,000
--------------------------------------------------------------------------------------------------------------------------
OPERATING INCOME                                       3,508,000          3,104,000          9,672,000          7,896,000
--------------------------------------------------------------------------------------------------------------------------
Interest income                                           32,000             65,000            122,000            147,000
Interest expense                                      (1,187,000)          (434,000)        (3,209,000)        (1,552,000)
Other expense                                            (52,000)          (852,000)          (134,000)          (979,000)
--------------------------------------------------------------------------------------------------------------------------
                                                      (1,207,000)        (1,221,000)        (3,221,000)        (2,384,000)
--------------------------------------------------------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES
     AND NON-CONTROLLING INTEREST                      2,301,000          1,883,000          6,451,000          5,512,000

PROVISION FOR INCOME TAXES                               644,000            565,000          1,808,000          1,654,000

NON-CONTROLLING INTEREST IN LOSS OF
     SUBSIDIARY                                         (23,000)           (40,000)           (40,000)            (1,000)
--------------------------------------------------------------------------------------------------------------------------
NET INCOME                                           $ 1,680,000        $ 1,358,000        $ 4,683,000        $ 3,859,000
--------------------------------------------------------------------------------------------------------------------------
NET INCOME PER SHARE - basic                               $0.20              $0.16              $0.56              $0.47
                     - diluted                              0.18               0.15               0.50               0.43
--------------------------------------------------------------------------------------------------------------------------
WEIGHTED AVERAGE COMMON  SHARES OUTSTANDING            8,456,727          8,287,262          8,404,070          8,275,858
--------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                      -2-
<PAGE>   4


                                ZEMEX CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOW
                     FOR THE NINE MONTHS ENDED SEPTEMBER 30
                                      (US$)
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------
                                                                                         1999                       1998
---------------------------------------------------------------------------------------------------------------------------
                                                                                                 (unaudited)
<S>                                                                               <C>                         <C>
CASH FLOWS FROM OPERATING ACTIVITIES
 Net income                                                                       $ 4,683,000                 $ 3,859,000
 Adjustments to reconcile income from operations
 to net cash flows from operating activities
     Depreciation, depletion and amortization                                       6,521,000                   4,824,000
     Amortization of deferred financing costs                                         173,000                     125,000
     Increase in future tax benefits                                                 (447,000)                   (234,000)
     Non-controlling interest in subsidiary earnings                                  (40,000)                     (1,000)
     Loss (gain) on sale of property, plant and equipment                              96,000                       3,000
     Decrease (increase) in other assets                                               13,000                    (611,000)
     (Decrease) increase in other non-current liabilities                            (417,000)                     92,000
     Changes in non-cash working capital items                                     (2,545,000)                 (2,286,000)
----------------------------------------------------------------------------------------------------------- ----------------
Net cash provided by operating activities                                           8,037,000                   5,771,000
----------------------------------------------------------------------------------------------------------- ----------------
CASH FLOWS FROM INVESTING ACTIVITIES
     Additions to property, plant and equipment                                   (11,965,000)                (13,979,000)
     Acquisitions, net of cash acquired                                                    --                  (7,440,000)
     Acquisitions of securities                                                            --                 (14,175,000)
     Proceeds from sale of assets                                                       1,000                   3,120,000
     Proceeds from sale of securities                                                      --                   9,772,000
----------------------------------------------------------------------------------------------------------- ----------------
Net cash used in investing activities                                             (11,964,000)                (22,702,000)
----------------------------------------------------------------------------------------------------------- ----------------
CASH FLOWS FROM FINANCING ACTIVITIES
     Net increase in long term debt                                                 9,803,000                  17,119,000
     Net (decrease) increase bank indebtedness                                     (7,000,000)                  7,000,000
     Issuance of common stock                                                         789,000                     765,000
     Purchase of common stock and options for treasury                               (107,000)                   (417,000)
----------------------------------------------------------------------------------------------------------- ----------------
Net cash provided by financing activities                                           3,485,000                  24,467,000
----------------------------------------------------------------------------------------------------------- ----------------
EFFECT OF EXCHANGE RATE CHANGES ON CASH                                                88,000                     (67,000)
----------------------------------------------------------------------------------------------------------- ----------------
NET (DECREASE) INCREASE IN CASH                                                      (354,000)                  7,469,000

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                    1,062,000                   2,189,000
----------------------------------------------------------------------------------------------------------- ----------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                                          $ 708,000                 $ 9,658,000
---------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                      -3-
<PAGE>   5

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The condensed consolidated financial statements include the accounts of Zemex
Corporation and its wholly-owned subsidiaries (the "Corporation"). The financial
data for the three months ended September 30, 1999 and 1998 and for the nine
months ended September 30, 1999 and 1998 are unaudited but, in the opinion of
the management of the Corporation, reflect all adjustments, consisting only of
normal recurring adjustments, considered necessary for a fair presentation of
financial position and results of operations. All material intercompany
transactions have been eliminated. See the Corporation's Annual Report on Form
10-K for the year ended December 31, 1998 for a complete list of accounting
policies. All dollar amounts shown herein are in U.S. dollars unless noted
otherwise.

1.   LONG TERM DEBT

In May 1999, the Corporation entered into note purchase agreements with private
investors whereby the Corporation issued $35 million, 7.54% Senior Secured
Notes, Series A, due May 21, 2009 and $15 million, 7.76% Senior Secured Notes,
Series B, due May 21, 2014. The proceeds of the note issues were used to retire
the Corporation's existing bank debt. The Corporation also entered into a credit
agreement, which provides a 364-day $20 million operating line of credit. The
notes and the credit facility rank pari passu with respect to security. The
obligations are secured by a pledge of subsidiary shares, a general security
interest and a negative pledge. The Corporation drew down $3 million on its
credit facility and retired its outstanding industrial development revenue bond
as of September 1, 1999.

2.   SEGMENT INFORMATION

The Corporation has three principal lines of business and is organized into
three operating units based on its product lines: (i) industrial minerals, (ii)
metal powders, and (iii) aluminum recycling.

Information pertaining to sales and earnings from operations and assets by
business segment appears below:

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
Three Months Ended                                   Industrial            Metal        Aluminum
September 30, 1999                 Consolidated        Minerals          Powders       Recycling       Corporate
-------------------------------------------------------------------------------------------------------------------
<S>                                 <C>             <C>              <C>             <C>              <C>
Net sales                           $29,774,000     $12,824,000      $ 9,659,000     $ 7,291,000      $        --
Operating income (loss)               3,508,000       1,921,000        1,609,000         807,000         (829,000)
Interest expense                     (1,187,000)        (58,000)         (40,000)         (8,000)      (1,081,000)
Net income                            1,680,000              --               --              --               --
-------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
Three Months Ended                                   Industrial            Metal        Aluminum
September 30, 1998                 Consolidated        Minerals          Powders       Recycling       Corporate
-------------------------------------------------------------------------------------------------------------------
<S>                                 <C>             <C>              <C>             <C>               <C>
Net sales                           $25,677,000     $10,336,000      $ 8,782,000     $ 6,559,000       $       --
Operating income (loss)               3,104,000       1,951,000        1,040,000         555,000         (442,000)
Interest (expense) income              (434,000)         48,000          (37,000)        (13,000)        (432,000)
Net income                            1,358,000              --               --              --               --
-------------------------------------------------------------------------------------------------------------------
</TABLE>

                                      -4-
<PAGE>   6

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
Nine Months Ended                                    Industrial            Metal         Aluminum
September 30, 1999                 Consolidated        Minerals          Powders        Recycling      Corporate
-------------------------------------------------------------------------------------------------------------------
<S>                                 <C>             <C>              <C>              <C>              <C>
Net sales                           $87,185,000     $38,116,000      $28,732,000      $20,337,000      $        --
Operating income (loss)               9,672,000       6,023,000        3,913,000        2,091,000       (2,355,000)
Interest expense                     (3,209,000)       (138,000)        (134,000)         (54,000)      (2,883,000)
Net income                            4,683,000              --               --               --               --
-------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
Nine Months Ended                                    Industrial            Metal         Aluminum
September 30, 1998                 Consolidated        Minerals          Powders        Recycling      Corporate
-------------------------------------------------------------------------------------------------------------------
<S>                                 <C>             <C>              <C>              <C>              <C>
Net sales                           $78,056,000     $33,384,000      $27,120,000      $17,552,000      $        --
Operating income (loss)               7,896,000       5,146,000        3,118,000        1,574,000       (1,942,000)
Interest (expense) income            (1,552,000)         83,000         (147,000)         (24,000)      (1,464,000)
Net income                            3,859,000              --               --               --               --
-------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
                                                     Industrial             Metal       Aluminum
September 30, 1999                 Consolidated        Minerals           Powders      Recycling       Corporate
-------------------------------------------------------------------------------------------------------------------
<S>                                 <C>             <C>               <C>            <C>             <C>
Current assets                      $43,037,000     $26,402,000       $ 9,998,000    $ 5,341,000     $ 1,296,000
Total assets                        159,555,000      79,993,000        25,601,000     37,168,000      16,793,000
Total current liabilities            17,653,000       5,850,000         3,792,000      3,289,000       4,722,000
Total shareholders' equity           87,664,000              --                --             --      87,664,000
-------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
                                                     Industrial            Metal         Aluminum
December 31, 1998                  Consolidated        Minerals          Powders        Recycling      Corporate
-------------------------------------------------------------------------------------------------------------------
<S>                                 <C>             <C>              <C>              <C>              <C>
Current assets                     $ 38,343,000     $22,770,000       $10,035,000     $ 3,513,000     $ 2,025,000
Total assets                        148,866,000      74,104,000        24,969,000      33,464,000      16,329,000
Total current liabilities            23,533,000       5,029,000         3,210,000       3,777,000      11,517,000
Total shareholders' equity           81,898,000              --                --              --      81,898,000
-------------------------------------------------------------------------------------------------------------------
</TABLE>


                                      -5-
<PAGE>   7

3.   DIFFERENCES FROM UNITED STATES ACCOUNTING PRINCIPLES

These consolidated financial statements have been prepared in accordance with
accounting principles generally accepted in Canada ("Canadian GAAP"). The
differences between Canadian and U.S. generally accepted accounting principles
("U.S. GAAP") do not have a material effect on the Corporation's reported
financial position, net income or cash flows except as follows:

a.   Statements of Income

     The implementation of the American Institute of Certified Public
     Accountants Statement of Position 98-5 ("SOP 98-5") requires costs of
     start-up activities and organization costs to be expensed as incurred.
     Canadian GAAP permits the deferral of such costs.

     For purposes of reporting in accordance with U.S. GAAP, certain equity
     securities that are not held principally for the purpose of sale in the
     near term are classified as available-for-sale securities, are reported at
     fair value and are translated at the current exchange rate which can give
     rise to an exchange gain or loss. For Canadian GAAP purposes, such
     securities are to be reported at cost and at the historical exchange rate.

<TABLE>
<CAPTION>
     ----------------------------------------------------------------------------------------------------------------
                                                      Three Months Ended                     Nine Months Ended
                                                         September 30,                          September 30,
     ----------------------------------------------------------------------------------------------------------------
                                                    1999                1998              1999                 1998

<S>                                           <C>                 <C>               <C>                  <C>
     Net income, as reported                  $1,680,000          $1,358,000        $4,683,000           $3,859,000
     Less: Start-up activities                  (552,000)         (1,363,000)       (1,844,000)          (1,363,000)
     Add: Exchange (loss) gain
          on available-for-sale
          securities                             (13,000)                 --           115,000                   --
     Tax effect related thereto                  158,000             409,000           484,000              409,000
     ----------------------------------------------------------------------------------------------------------------
     Net income (U.S. GAAP)                   $1,273,000            $404,000        $3,438,000           $2,905,000
     ----------------------------------------------------------------------------------------------------------------
     Net income per share
     (U.S. GAAP)
                - basic                            $0.15               $0.05             $0.41                $0.35
                - fully diluted                    $0.15               $0.05             $0.41                $0.34
     ----------------------------------------------------------------------------------------------------------------
</TABLE>

b.   Balance Sheets

     The following summarizes the balance sheet amounts in accordance with U.S.
     GAAP where different from the amounts reported under Canadian GAAP.

     For purposes of reporting in accordance with U.S. GAAP, certain equity
     securities that are not held principally for the purpose of sale in the
     near term are classified as available-for-sale securities and are reported
     at fair value, with unrealized gains and losses excluded from earnings and
     reported in a separate component of shareholders' equity. For Canadian GAAP
     purposes, such securities are to be reported at cost and included in other
     assets unless there is deemed to have been a permanent impairment in their
     value.

     U.S. GAAP, SOP 98-5, requires that the costs of start-up activities be
     expensed in the period incurred rather than be deferred. SOP 98-5 is
     effective for periods beginning after December 15, 1998. Initial
     implementation is reported as a cumulative effect of a change in accounting
     principle without retroactive application.

                                      -6-
<PAGE>   8
<TABLE>
<CAPTION>
     ---------------------------------------------------------------------------------------------------------------
                                                        September 30, 1999                December 31, 1998
                                                  Canadian GAAP        U.S. GAAP      Canadian GAAP       U.S. GAAP
     ---------------------------------------------------------------------------------------------------------------
<S>                                                 <C>              <C>                <C>             <C>
     Property, plant and equipment                  $95,603,000      $92,866,000        $89,058,000     $89,058,000

     Other assets                                    20,377,000       18,501,000         21,374,000      20,440,000
     Accrued income taxes                               967,000          483,000            644,000         644,000
     Retained earnings                               33,101,000       30,679,000         28,418,000      28,418,000
     Unrealized loss on available-for-sale securities        --       (1,707,000)                --        (934,000)
     ---------------------------------------------------------------------------------------------------------------

</TABLE>

c.   Statements of Comprehensive Income

     U.S. GAAP requires a statement of comprehensive income as follows:

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
                                                          Three Months Ended                   Nine Months Ended
                                                             September 30,                       September 30,
----------------------------------------------------------------------------------------------------------------------
                                                             1999             1998             1999             1998
<S>                                                    <C>                <C>             <C>              <C>
Net income (U.S. GAAP)                                 $1,273,000          $404,000       $3,438,000       $2,905,000
Change in foreign currency translation
   adjustment, net of tax (1999, ($7,000);
   $112,000; 1998, ($106,000); ($172,000))                (18,000)         (248,000)         289,000         (402,000)
Change in unrealized holding gains (losses)
   on available-for-sale securities                         3,000          (413,000)        (772,000)        (413,000)
----------------------------------------------------------------------------------------------------------------------
Comprehensive income                                   $1,258,000         $(257,000)      $2,955,000       $2,090,000
----------------------------------------------------------------------------------------------------------------------
</TABLE>

Recent Accounting Pronouncements

In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities" (SFAS No. 133), which established accounting
and reporting standards for derivative instruments and hedging activities. It
requires an entity to measure all derivatives at fair value and to recognize
them in the balance sheet as an asset or liability, depending on the entity's
rights or obligations under the applicable derivative contract. Management has
not yet evaluated the effects of this statement on its results of operations. As
required, the Corporation will adopt SFAS No. 133 for years ending on or after
June 15, 2000, for U.S. GAAP purposes.

ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE FINANCIAL CONDITION AND
RESULTS OF OPERATIONS OF THE CORPORATION

The following is a discussion and analysis of the financial condition and
results of operations of the Corporation for the three months ended September
30, 1999 and the three months ended September 30, 1998, and for the nine months
ended September 30, 1999 and the nine months ended September 30, 1998, and
certain factors that may affect the Corporation's prospective financial
condition and results of operations. The following should be read in conjunction
with the consolidated financial statements and related notes thereto.

                                      -7-
<PAGE>   9

RESULTS OF OPERATIONS

THREE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO THREE MONTHS ENDED
SEPTEMBER 30, 1998

Net Sales

The Corporation's net sales for the three months ended September 30, 1999 rose
16.0% to $29.8 million from $25.7 million for the three months ended September
30, 1998 as a result of increased sales in each of the Corporation's three
business segments.

The Corporation's industrial minerals segment reported sales of $12.8 million
for the three month period ended September 30, 1999, an increase of $2.5
million, or 24.1%, from the third quarter of 1998, reflecting increased sales
volume of feldspar, mica, talc and clay.

In the metal powders division, an increase in sales of both sponge iron and
atomized products contributed to a $0.9 million increase in total net sales to
$9.7 million for the three months ended September 30, 1999. The increased sales
is mainly due to the success the Corporation has had in focusing on being a
supplier of specialty atomized products.

Higher aluminum prices, an increase in tolling and tipping revenues and an
increase in sales of flameshield products helped improve net sales in the
aluminum recycling segment to $7.3 million for the three month period ended
September 30, 1999, an increase of $0.7 million, or 11.2%, over the same period
in 1998. This increase was partially offset by a decrease in the number of
pounds of aluminum sold due to tight capacity in the world aluminum market and
the resultant lower grade of available feedstock.

Cost of Goods Sold

Cost of goods sold for the three months ended September 30, 1999 was $20.5
million compared to $18.1 million for the third quarter of 1998. As a percentage
of net sales, gross margin increased from 29.4% for the three months ended
September 30, 1998 to 31.2% for the corresponding period in 1999. The increase
in gross margin is attributable to higher volumes and a focus on cost control
and improved operating efficiencies.

Selling, General and Administrative Expense

Selling, general, and administrative ("SG&A") expense for the three months ended
September 30, 1999 increased by 23.8% to $3.6 million from $2.9 million in the
comparable period of 1998; however, as a percentage of net sales, SG&A expense
was 12.0% in the third quarter of 1999, virtually unchanged from the same period
in 1998.

Depreciation, Depletion and Amortization

Depreciation, depletion and amortization ("DD&A") for the three months ended
September 30, 1999 was $2.2 million, an increase of $0.7 million, or 42.5%, over
the corresponding period in 1998. This increase is due to capital expenditures
made and placed in service during the last twelve months.

Operating Income

As a result of the foregoing, operating income for the three month period ended
September 30, 1999 was $3.5 million, an increase of $0.4 million, or 13.0%, from
the comparable period in 1998.

                                      -8-
<PAGE>   10

Interest Income

Interest income for the three months ended September 30, 1999 was slightly lower
than the $0.1 million recognized in the same quarter of 1998.

Interest Expense

Interest expense for the three months ended September 30, 1999 was $1.2 million,
compared to $0.4 million in the corresponding period in 1998. Part of the
increase is due to a $2.4 million increase in total indebtedness to $54.3
million at September 30, 1999 from $51.9 million at September 30, 1998. The
balance is due to the interest expense associated with certain capital projects
and investments that was previously being capitalized and is now being expensed.

Other Expense

Other expense for the three months ended September 30, 1999 was $0.1 million,
compared to $0.9 million for the corresponding period of 1998. During the third
quarter of 1998, the Corporation recognized a one-time foreign exchange loss of
$0.7 million in connection with its investment in Inmet Mining Corporation
("Inmet"). During 1998, the Corporation initiated an attempted acquisition of
control of Inmet and approximately 4 million shares of Inmet were acquired and
financed by the Corporation's credit facilities as a result. Subsequently, the
acquisition was abandoned and the Corporation sold approximately 2.6 million
common shares of Inmet for proceeds of approximately C$14.7 million. As at
September 30, 1998, the Corporation booked a provision of $413,000 as a
reduction to shareholders' equity to mark to market the residual investment in
the available-for-sale securities. The Corporation also booked a foreign
exchange loss of $0.7 million in other income as a result of a decline in the
value of its Canadian dollar investment in Inmet.

Provision for Income Taxes

As a result of a 22.2% increase in pre-tax income, the Corporation's provision
for income taxes for the three months ended September 30, 1999 increased
slightly to $0.6 million compared to the same period in 1998.

Net Income

As a result of the factors discussed above, net income for the three months
ended September 30, 1999 was $1.7 million, an increase of $0.3 million, or
23.8%, from the comparable period in 1998.


NINE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED TO NINE MONTHS ENDED
SEPTEMBER 30, 1998

Net Sales

On a year-to-date basis, the Corporation's net sales for the nine months ended
September 30, 1999 rose $9.1 million, or 11.7%, to $87.2 million over the first
three quarters of 1998 as a result of increased sales in each of the
Corporation's three business segments.

Net sales in the industrial minerals segment for the nine month period ended
September 30, 1999 were up by $4.7 million to $38.1 million from $33.4 million
in 1998. The increase is due to higher sales volume of most of the Corporation's
major industrial mineral products.

                                      -9-
<PAGE>   11

In the metal powders segment net sales for the nine months ended September 30,
1999 were $28.7 million, an increase of $1.6 million, or 5.9%, from the
comparable period in 1998. The increase is primarily the result of sales of
ferrous atomized products. The Corporation redirected its strategy to focus on
supplying specialty niche atomized products about two years ago and is
capitalizing on the success of this initiative.

Net sales in the aluminum recycling segment for the nine month period ended
September 30, 1999 rose $2.8 million or 15.9% to $20.3 million over the same
period in 1998. Most of the difference year over year is due to the
Corporation's acquisition of an aluminum dross processor in Wabash, Indiana, in
June 1998; the 1999 period includes a full nine months contribution from this
operation.

Cost of Goods Sold

Cost of goods sold for the nine months ended September 30, 1999 was $60.1
million, an increase of $4.5 million, or 8.1%, over the first three quarters of
1998. As a percentage of net sales, gross margin increased to 31.0% in 1999 from
28.8% in 1998. The increase is due to higher sales volumes and improved
operating efficiencies.

Selling, General and Administrative Expense

SG&A expense for the nine months ended September 30, 1999 rose to $10.9 million
from $9.7 million in 1998, an increase of $1.2 million, or 11.7% due to
increased staffing; however, as a percentage of net sales, SG&A expense remained
virtually unchanged at 12.5% from the corresponding period in 1998.

Depreciation, Depletion and Amortization

DD&A for the nine months ended September 30, 1999 was $6.5 million, an increase
of $1.7 million, or 35.2%, over the comparable period in 1998 as a result of
assets acquired and placed in service over the last twelve months. On a
year-to-date basis the Corporation has spent $12.0 million on capital
expenditures in 1999.

Operating Income

Operating income for the nine month period ended September 30, 1999 was $9.7
million, an increase of $1.8 million, or 22.5%, from the comparable period in
1998. As a percentage of sales, operating income increased to 11.1% in the first
three quarters of 1999 from 10.1% in the corresponding period of 1998.

Interest Income

Interest income for the nine months ended September 30, 1999 was $0.1 million,
slightly lower than the corresponding period in 1998.

Interest Expense

Interest expense for the nine months ended September 30, 1999 was $3.2 million,
106.9% or $1.7 million, higher than the same period in 1998. Part of the
increase is due to an increase in total indebtedness and the balance is due to
the interest expense associated with certain capital projects and investments
that was previously being capitalized and that is now being expensed.

                                      -10-
<PAGE>   12
Other Expense

Other expense for the nine months ended September 30, 1999 was $0.1 million,
compared to $1.0 million in the same period in 1998. As outlined above, the
Corporation recognized a translation loss of $0.7 million in the third quarter
of 1998 in connection with its acquisition of approximately 4 million common
shares of Inmet.

Provision for Income Taxes

The Corporation's provision for income taxes for the nine month period September
30, 1999 increased to $1.8 million from $1.7 million in the comparable period of
1998.

Net Income

As a result of the factors discussed above, net income for the nine months ended
September 30, 1999 was $4.7 million, a increase of $0.8 million, or 21.3%, from
the comparable period in 1998.


LIQUIDITY AND CAPITAL RESOURCES

Cash Flow from Operations

During the first nine months of 1999, the Corporation generated $8.0 million of
cash from operations as compared to $5.8 million cash generated for the first
nine months of 1998.

The Corporation had $25.4 million of working capital at September 30, 1999,
compared to $14.8 million at December 31, 1998. The working capital increase is
mainly due to the new debt facilities entered into by the Corporation. On May
21, 1999 the Corporation issued $35 million of 7.54% Senior Secured Notes,
Series A, due May 21, 2009 and $15 million of 7.76% Senior Secured Notes, Series
B, due May 21, 2014. The proceeds were used to repay the Corporation's existing
credit facilities. Concurrent with the bond issue the Corporation entered into a
credit agreement, which provides a 364-day, $20 million revolving operating
facility. The Corporation drew down $3.0 million under the operating facility
and retired its outstanding industrial development revenue bond as of September
1, 1999.

It is the opinion of management that there are sufficient sources of funds
available to meet its anticipated cash requirements.


YEAR 2000

The Corporation operates in basic industries that do not rely heavily on
computerized systems. The major systems operated by the Corporation are those
for financial reporting, all of which are year 2000 compliant. As a result, it
is the opinion of management that any year 2000 issues that may arise will not
have a material adverse impact on the financial condition or performance of the
Corporation. The Corporation is continuing its review of key suppliers to
determine their exposure to problems arising from Year 2000. The review is being
conducted by management and additional resources are not believed to be
required. Given the current status of the Corporation's activities, no
contingency plans are currently in place.

                                      -11-
<PAGE>   13

ITEM 3 - MARKET RISK

Market risk represents the risk of loss that may impact the consolidated
financial statements of the Corporation due to adverse changes in financial
market prices and rates. The Corporation's market risk is primarily the result
of fluctuations in interest rates and aluminum prices. Management monitors the
movements in interest rates and performs sensitivity analysis on aluminum prices
and, on that basis, decides on the appropriate measures to take. The Corporation
believes that aluminum prices and interest rates in the current environment are
such that no measures need be taken at this time.

The Corporation does not hold or issue financial instruments for trading
purposes. A discussion of the Corporation's financial instruments is included in
the financial instruments note to the Consolidated Financial Statements in the
Corporation's 1998 Annual Report, which are incorporated by reference in the
Corporation's Form 10K for the year ended December 31, 1998.


CAUTIONARY "SAFE HARBOR" STATEMENT UNDER THE
UNITED STATES PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

With the exception of historical matters, the matters discussed in this report
are forward looking statements that involve risks and uncertainties that could
cause actual results to differ materially from targeted or projected results.
Factors that could cause actual results to differ materially include, among
others, fluctuations in aluminum prices, problems regarding unanticipated
competition, processing, access and transportation of supplies, availability of
materials and equipment, force majeure events, the failure of plant equipment or
processes to operate in accordance with specifications or expectations,
accidents, labor relations, delays in start-up dates, environmental costs and
risks, the outcome of acquisition negotiations and general domestic and
international economic and political conditions, as well as other factors
described herein or in the Corporation's filings with the Commission. Many of
these factors are beyond the Corporation's ability to predict or control.
Readers are cautioned not to put undue reliance on forward looking statements.


                                     PART II

ITEM 5 - OTHER INFORMATION

In October 1999, the Corporation extended a loan to Richard L. Lister, President
and Chief Executive Officer, in the amount of $1,749,000, representing amounts
due from him pursuant to the Key Executive Common Stock Purchase Plan. The loan,
which was used to acquire 357,000 common shares of the Corporation, is
non-interest bearing and secured by a pledge of most of the shares acquired. The
loan is renewed annually and is now due on the earlier of August 12, 2000 or 30
days after the termination of employment. Since the loan arose from the sale of
treasury stock, it is classified as a reduction of shareholders' equity.

ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

 Reports on Form 8-K

         None.

                                      -12-
<PAGE>   14

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

Dated this 22nd day of October, 1999.


                              ZEMEX CORPORATION
                              (Registrant)


                              By:   /s/ Allen J. Palmiere
                                   ---------------------------------------------
                                    Allen J. Palmiere
                                    Vice President and Chief Financial Officer




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