Environment

Waste management

GRI 306-2, 306-3, 306-4, 306-5

Circular economy

With a focus on reducing waste generation, reducing waste destined for landfills and increasing reuse, providing a reduction in the consumption of raw materials for its activities, MRS understands the waste management process as an opportunity for the application of the circular economy.

For some years, recycling and reuse have been part of the Company’s strategy. All waste generated undergoes a thorough analysis to identification of the possibility of reuse, either by the Company or by third parties. Keeping intact the necessary safety for operations and employees, MRS makes regular use of components recovered by maintenance teams, such as batteries, electronic, mechanical and brake components, cast items, wheels, wagon and locomotives wheelsets, avoiding the use of natural resources to manufacture new items.

In 2022, around 3,236 tons of waste were generated in maintenance activities, 36% higher than the previous period. Of this total, around 1,790 tons were destined for reuse/recycling.

The increase in waste generation in 2022 can be explained by specific activities that took place during the year:

of water and oil waste from the unscheduled cleaning of the industrial effluent treatment plant at Belo Horizonte (MG) unit caused by the high volume of rainfall, and this waste was sent for co-processing;

of contaminated waste generated in the decommissioning process of old locomotives. The metal scrap generated was sent for recycling and the contaminated waste for co-processing;

of waste from leaks of non-hazardous cargo in the state of São Paulo, mainly caused by vandalism in transport wagons. Waste was sent to a class II landfill;

of rubble generated in specific building works in Rio de Janeiro. Waste was sent to a class II landfill;

Excluding the aforementioned waste generated on a one-off basis, MRS generated around 2,374 tons of waste in routine processes, 1% lower than in 2021.

In 2022, the Company sent 56% more waste to landfills, mainly due to the aforementioned events. Additionally, the Company also allocated approximately 22% more waste to sustainable alternatives, such as recycling, co-processing and the like.

MRS also has a partnership with external suppliers in three reverse logistics processes: packages of herbicides applied in chemical weeding (5,975 packages in 2022); lead batteries (127t of batteries in 2022) and, for the first time, with polypropylene lubricating oil packaging, previously destined for co-processing in class I landfills and now reused from suppliers in Minas Gerais, a number representing about of 1t in 2022 and with the expectation of doubling in volume with the project expansion to São Paulo and Rio de Janeiro.

Also in 2022, MRS started to count on a ballast cleaner, with the main purpose of changing railway ties (wooden for concrete). The acquisition has a positive impact on the sensitive inputs acquired by the Company, since the replacement of wooden railway ties, which have an average useful life five times shorter than concrete railway ties, help to reduce inputs and significantly reduce waste generation. The project started in 2019 and, following the delivery stages, the arrival in Brazil occurred in the last cycle.

Materials reused in 2022 that were no longer sent to landfills and avoided the purchase of new items that would become new waste in the future

of railway ties reused in the railway network

of railway ties reused by third parties

tons of rails reused in the railway network

tons of metal scrap reused by third parties

liters of oil sold for re-refining by third parties

tons of lead batteries sold for reverse logistics application

of other wood (excluding railway ties) generated in maintenance processes, such as pallets

of recyclable waste (paper, cardboard, plastic, among others), mainly through associations of collectors and recyclers

Waste

MRS is fully committed to ensuring the proper disposal of its waste. As a result of a mature and well-established process, controlled by EMS indicators, in 2022, 100% of the waste generated at the Company’s units was properly managed and there were no fines.

MRS has constantly evolved in search of correct and sustainable destinations, applying concepts of circular economy, P+L and eco-efficiency.

With a sizeable (three states) and extremely spread-out operation (more than 80 units), the Company has a robust Waste Management Program, controlled from origin to final destination, with a contracted company and several destinations throughout Minas Gerais and São Paulo to send more than 3,200 tons of solid waste of classes I and II, of various types, per year.

Approximately R$ 5 million is invested annually for the correct waste management and improvements. One of the highlights in 2022 is the process performed with the drying bed of the effluent treatment plants, which represented between 40 and 50 tons of waste per year, previously classified as class I (hazardous) and sent to landfill, and which, after improvement in the process, is being categorized as class II (non-hazardous) and sent to co-processing and/or class II landfill, avoiding the generation of hazardous waste. For structural improvements in facilities and maintenance services, the Company invests more than R$ 1 million.

In all units, trained employees are responsible for assessing the generation, segregation and packaging of waste. Training is carried out periodically by environmental technicians, the environmental education program and the outsourced waste manager.

All suppliers in the chain undergo a rigid approval process, with auditing of the processes and emphasis on environmental licensing and compliance with other legal requirements. This process occurs before the beginning of the activities and periodically during the term of the agreement, in order to maintain the quality of the services provided and to make suppliers aware of the importance of enforcing legal compliance. On a routine basis, environmental technicians, together with a specialized company hired, control all waste handling, ensuring compliance with legal documents and vehicles and equipment in traffic condition. In 2021 and 2022, MRS Internal Audit area audited the process and ensured legal and risk compliance in MRS management.

MRS maintenance and administrative activities naturally generate solid waste classified as class I and class II. The Company invests annually in the hiring and maintenance of specialized companies for the correct management of waste in all its units.

GRI 306-3

Waste generated in metric tons by waste composition