A melting furnace or cupola utilizing electric arc heaters to provide an arc-heated air stream to melt loose metal chips as well as larger pieces of metal scrap. In one embodiment, the arc-heated gas stream and metal chips are directed into a melting segment with the melted chips and gas stream passing therefrom into the furnace through a tuyere. In another embodiment an electric arc heater serves as a tuyere for the furnace with the metal chips being fed into the arc-heated stream at the outlet of the arc heater. The chips and arc-heated air stream immediately enter the furnace wherein melting of the metal chips occurs. With either embodiment, recycling of the gases in the furnace and metal chip preheat can be provided.