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This is metallic sediment which is normally removed by the 'anode rod' -If you've never changed the anode, it's time now . This is a large bolt head on top of the tank, which originally held a rod about 3 feet long. Switch off incoming water and loosen this bolt. You will almost certainly need a large socket and a 24" breaker bar. Loosen only a turn, then drain the tank. You first turn OFF the power to tank, then attach a hose pipe to the bottom fitting, lead it outside or to any drain, turn on the valve by it, open the relief valve so air can enter the H/W tank. Let the whole tank empty -takes about 30 -40 minutes. While this is happening pull the anode out and get a new one fitted in. -( About $25 in most Plumbing stores.) Next, when empty turn ON the inlet valve and let cold water run through the tank and out the hose, now you will see the sludge coming out. Let this run 5-7 minutes or until water is coming through clean. Now you are done . Let it fill, then turn on power.

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Q: What causes black substance in electric hot water heater?
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