The barley is soaked in water and allowed to start sprouting (malting).
When the malt-man judges that the sprouting has produced enough sugar in the grain, he transfers the malted barley (or malt) to the kiln. The heat in the kiln dries the malt and stops is sprouting further. The malt is then passed through a mill to break it up into grist, a very course flour.
The proverb "all is grist for the mill" means "everything can be made useful, or be a source of profit." This is very much in keeping with the parable of the talents which we heard on Sunday.