I've wondered the same thing. I've got barrels of aluminum milled chips sitting around waiting for the reluctant traveller (you know the type) to come around and offer me a pittance for them.
I was thinking of something like a man sized bolt action chamber, with the end of the hydraulic cylinder ram always engaged, and feeding the chips down through the slot for compaction.
I wonder if a person could rely on the taper of the 'barrel' on this thing to provide enough restriction that you would get decent compaction after the slug had passed a couple of feet through. Maybe one would have to block up the end initially to get compaction started. After the barrel was full, and reasonably tough to move, further compaction would take place on top of the existing slug.
The resultant chip slug would come out like core, I suppose, or it might break off by itself in reasonable lengths.