The company said it will set up a processing centre in Newport, South Wales, where it already operates a one million tonne a year hot strip mill.
Recycling centres are also expected to be set up in other areas, including Scotland, the North East, South East and the Midlands.
Liberty said it will develop its recycling business in the United States and continental Europe as well.
Liberty House executive chairman Sanjeev Gupta said the launch was a "very significant step" for the steel industry.
He added: "The projected growth in the supply of scrap in the UK and in other developed economies over the coming years provides the basis for a strong, competitive and sustainable steel industry for the future."