IFC’s appraisal considered the environmental and social management planning process and documentation for the Project and gaps, if any, between these and IFC’s requirements. Where necessary, corrective measures, intended to close these gaps within a reasonable period of time, are summarized in the paragraphs that follow and (if applicable) in an agreed Environmental and Social Action Plan (ESAP). Through implementation of these measures, the Project is expected to be designed and operated in accordance with Performance Standards objectives.
PS 1 - Assessment and Management of Environmental and Social Risks and Impacts.
Policy and ESMS. BMB ’s operations are guided by its corporate EHS and sustainability policies which outline the company’s commitment to comply with local regulations and to conduct operations safely. The policies are communicated to all employees and are integrated into BMB’s EHS management system and are consistent with PS requirements. BMB is working to align its management system with the requirements of ISO 14001 (Environmental management), ISO 45001 (Occupational Health and Safety management) and ISO 9001(Quality management).
As part of the integrated management system (IMS) for its Brazilian operations, BMB has documented E&S management and monitoring programs, standard operating procedures and an emergency preparedness and response plan. As per ESAP #1, BMB will update its IMS per EIA, national law, WBG General EHS guidelines and WBG EHS Guidelines for Integrated Steel Mills, to address the E&S risks of the Phase I and Phase II of the Project, including enhanced environmental monitoring protocols, protection from sexual exploitation, abuse and harassment (SEAH) enforcement indicators, and a more robust stakeholder engagement plan.
BMB identifies E&S risks and impacts related to its operations mainly through the assessment of legal requirements. For the development of the industrial scale facility funded as part of the project, BMB has developed an environmental impact assessment (Relatório de Controle Ambiental - RCA) and environmental management plan (Plano de Controle Ambiental - PCA) which have been publicly disclosed and approved by state authorities. These documents include baseline data, assessing the E&S impacts of the project and detailing the project and site-specific mitigation and monitoring measures. BMB has supplemented the RCA with an Atmospheric Dispersion Study to identify potential impacts resulting from new plant production processes. The modeling was carried out following the requirements and standards set forth in national legislation and WBG General EHS Guidelines.
Organizational capacity. BMB formally established its ESG organizational structure for Brazil in 2023, which is composed of an ESG manager, environmental engineer and a social responsibility analyst. In addition, there is a robust OHS team in charge of the development and implementation of OHS procedures.
Emergency Preparedness and Response Plan. BMB has an Emergency Preparedness and Response Plan (EPRP) which is updated frequently and outlines emergency response procedures for various scenarios, detailing the roles and responsibilities of the emergency team, and communication protocols, including contacts of external resources. In addition, BMB has a Radiological Emergency Plan, outlining procedures for managing emergencies involving slag during operation and transport.
As per ESAP #2, BMB will update the HAZOP study and perform a Quantitative Risk Assessment (QRA) for Phase II of the Project. The assessments will address potential exposure pathways and failure scenarios and will be conducted in alignment with IFC Performance Standards 1 and 4 requirements, ensuring risks to workers, the community, and the environment are identified, quantified, and addressed through an updated EPRP. In addition, the updated EPRP will include communication flows with surrounding communities and define measures to prevent the spread of wildfire exacerbated by climate change in the project's area, aiming to protect workers, facilities, and prevent further environmental damage.
Management and monitoring programs. BMB has established a comprehensive set of EHS KPIs that are continuously monitored through an online platform. The platform allows for the definition and follow-up of corrective action plans that are reviewed by the management team once per month. In addition, BMB performs regular audits and inspections and has developed a mobile app to log all inspections and report unsafe conditions.
BMB has documented a management program for contractors that outlines the EHS management requirements such as waste management plans, compliance with environmental regulations, and reporting of incidents. Further, through its contractor management and assurance plan, BMB verifies that third parties have adequate controls to manage EHS risks. Verification includes background checks, labor conditions, occupational exams and safety protocols. All contractors are included in OHS monitoring practices. As part of ESAP #3, BMB will develop a construction phase EHS management plan outlining procedures and measures to manage and mitigate EHS risks during the construction of Phase II. In addition, BMB will develop an operational ESMP for the operation of Phase II as per the EIA, national law, WBG General EHS Guidelines and WBG EHS Guidelines for Integrated Steel Mills.
Supply chain. Key materials to be used in the process include slag, charcoal, limestone and processed steel scrap. BMB is planning to process slag generated from mining and metallurgical operators in Brazil. Limited quantity of charcoal will be sourced from third party Eucalyptus plantations in neighboring municipalities where open savanna is susceptible to afforestation and has shown decline. Steel scrap and limestone will be provided by local companies specializing in the supply of these materials.
BMB has developed a Supplier Risk and Onboarding Policy to define the procedures for assessing, monitoring, and mitigating risks associated with suppliers, including E&S aspects. Moreover, Boston Metal conducts E&S and Compliance assessments on a risk-based approach. Specifically for slag suppliers, Boston Metal requires all suppliers to fulfill a questionnaire and provide relevant documentation and information related to environmental and operational licenses which cover conditions for disposal of the sludge after BM processing which contains valuable materials such as zirconium, and litigation history (including contaminated areas) related to slag disposal sites, and product traceability. Further, contractual agreements require compliance with Boston Metal’s Code of Conduct slag suppliers.
As per ESAP # 4, BMB will: i) supplement its Supplier Risk and Onboarding Policy with specific provisions regarding the sourcing of charcoal to ensure that products are traceable to origin and requiring no conversion of Natural Habitat; ii) conduct verification of its charcoal sourcing (i.e. purchase of certified product); iii) supplement its Supplier Risk and Onboarding Policy, Compliance Third Party Risk Management Policy and E&S Contractor Management and Assurance Protocol further describing due diligence requirements related to IFC PSs, including child/forced labor, adequate OHS conditions, and no conversion of natural habitat, as well as monitoring procedures including on-site inspections, where applicable and base on a risk-based approach.
As per ESAP #5, before partnering with slag suppliers, BMB will conduct a detailed E&S and Compliance due diligence and establish monitoring protocols which will be reflected in contractual agreements. The due diligence will cover E&S and Compliance aspects. As part of the E&S due diligence (DD) process, a comprehensive document review (and monitoring thereafter with periodical renewals of the DD) to verify their compliance with environmental regulations, working conditions (child/forced labor), environmental standards, health and safety practices and effectiveness of radioprotection measures according to the procedures already implemented at BMB. As part of E&S DD BMB will review the existence of potential historical pollution of soil or groundwater related to the slag disposal practices of slag owner (i.e. declaration issued by the slag supplier to the environmental agencies). The process to approve identified red flags will follow the workflow to be documented in the Third Party Risk Management Policy and may require approval of the national Critical Feedstock Committee of the Board of Directors.
PS 2 – Labor and Working Conditions
Working conditions and management of worker relationship. BMB has significantly expanded its workforce in Brazil and as of March 2025 has 144 employees, out of which 36 are women. HR policies, benefits and obligations are outlined in the Employee Handbook; working conditions are aligned with national labor legislation and follow collective bargaining agreements which are negotiated yearly.
BM updated its Code of Conduct in 2024 which applies to all employees, including internal committee members and executive directors, suppliers and third parties acting on behalf of the company. The Code of Conduct (CoC) covers the company’s commitment to diversity and inclusion, respect for human rights and zero tolerance for discrimination, harassment and sexual harassment. It also includes provisions against child or forced labor in its own operations and supply chain. The CoC is consistent with PS2 requirements.
The company offers an anonymous whistleblowing channel managed by an independent third party, which is accessible via phone and website (https://secure.ethicspoint.com/domain/media/en/gui/89320/index.html). Boston Metal has a Whistleblower Channel and Consequence Management Policy that establishes the guidelines to identify, investigate and act on received grievances. The Compliance Department implements and enforces unbiased investigations, with oversight by bodies like the Audit Committee and the Regional Compliance Working Group. However, the Consequence Management Policy lacks a mandate for women's representation, which is instrumental to prevent biases and ensure fair treatment for complainants, addressing gender-specific issues. As per ESAP #6, and in line with good international industry practices, BM will supplement the Whistleblower Channel and Consequence Management Policy specifying a minimum representation of women for grievance investigation and decision-making.
Workers engaged by third parties. BMB relies on third parties for the construction of its industrial facilities and for specific tasks such as maintenance or electrical works during operations. A peak workforce of 485 people is expected for Phase I construction and 724 people for Phase II construction. No workforce accommodation camps are envisioned as part of the project as workers will stay at hotels or private residences in Sao Joao del Rei, located 14 km from the project area. Monthly inspections are carried out by BMB responsible for allocating the accommodations, and BMB conducts complementary inspections on a sampling basis per national legal requirements. As per ESAP #7, BMB will supplement its inspection program to ensure accommodations follow the requirements of IFC/EBRD Workers’ Accommodation: Guide Notes on Provision of Housing (2009).
Occupational health and safety. BMB has developed an OHS management system that includes job hazard analysis for each task, standard operating procedures and a permit-to-work system for highest risk activities. In addition, BMB monitors leading, and lagging OHS indicators, including safety observations and inspections (leading) and lost time frequency rate and severity rate (lagging). Accidents are investigated and recorded.
The project will involve simultaneous operations (SIMOPS) with the operation of Phase I and the construction of Phase II. To mitigate these risks and as per ESAP #8, a comprehensive SIMOPS procedure will be formalized, and a dedicated SIMOPS coordinator will be designated to oversee and manage the concurrent activities, ensuring they are carried out safely.
BMB has prepared a comprehensive radioprotection program based on a radiological safety assessment per national law to manage risks associated with the naturally occurring of radionuclides in the mining and metallurgical slag that will be processed. The program includes several measures: i) the entire process will be automated, eliminating operator contact with slag; ii) workers will be equipped with personal dosimeters to measure cumulative radiation doses; iii) regular radiation surveys will be conducted to assess and monitor radiation levels in the workplace; iv) personal protective equipment (PPE) will be used; v) training will be provided about risks associated with radionuclides and safety procedures to minimize exposure; and, vi) access controls will be implemented. In addition, BMB has a radioprotection supervisor certified by the National Nuclear Energy Commission (CNEN by its Portuguese acronym). As per ESAP #9, BMB will update its current radioprotection program for the operation of Phase I and II, including i) controlled work areas (containment, ventilation, decontamination, ii) a continuous monitoring of radiation and alarm system for the work area to measure background radiation and any increases during the melting process, iii) personal monitoring procedure to track individual exposure levels; iii) an action threshold and control matrix; iv) radiological health surveillance plan. As per ESAP #10, BMB will commission regular external audits to verify compliance with CNEN radioprotection program requirements of Phase I and II of the project.
PS-3 Resource Efficiency and Pollution Prevention
Resource use. Main resources used in the process include electricity and mining and metallurgical slag. Limited quantity of Charcoal, limestone and processed steel scrap are used to adjust the process in the furnace and the MOE cell. Renewable energy will be sourced from the national electrical grid with an annual demand of 90,720,000 kWh upon completion of Phase II. Water will be drawn from Carandi River, with an expected total consumption of approximately 170m3/day and will be used for cooling systems, cleaning, dust suppression on internal roads, and human consumption for Phase I and II.
GHG emissions: Total scope 1 and scope 2 emissions for industrial phases I and II will be around 74k tons CO2 eq/year, also resulting in an avoidance of nearly 296k tons CO2 eq/year compared to conventional technologies.
Pollution prevention. MOE technology only requires water for cooling, which circulates in a closed-loop system, resulting in no industrial liquid effluents. Domestic wastewater is processed in a treatment plant that will be upgraded to handle the expansion in the workforce.
The main sources of point air emissions will be the drier, the chimneys of electric arc furnaces, electrolytic cells and shot blasting, consisting primarily of particulate matter (PM), sulfur dioxide (SO2), nitrogen oxides (NO2) and carbon monoxide (CO) from the combustion of fuels inside the furnaces and the oxidation of carbon anodes. The project design includes dust collectors, baghouses and cartridge filters for control and management of air emissions. According to the technical design, concentrations of PM in air emissions are expected to be lower than 20 mg/m3 and PM retained in the air filtration systems will be collected and reprocessed. In addition, the air dispersion model demonstrated that the predicted ground level concentration of air pollutants at the closest external receptors will remain below limits established by local regulations and WHO guidelines for ambient air quality. As per ESAP #11, BMB will implement a continuous air emission monitoring system with the focus on PM emissions to ensure compliance with national particulate emission standards and emission level guidelines of the WBG EHS Guidelines for Integrated Steel Mills. As per ESAP #12 BMB will commission a specialized and certified third party to develop and implement its air monitoring program based on national legislation and WBG EHS Guidelines for Integrated Steel Mills.
BMB activities will produce limited amounts of solid waste. Solid waste will be generated in administrative areas, warehouse and workshops and will be managed according to the Solid Waste Management Plan as part of its ESMS which provides guidelines for its segregation, storage, and disposal. BMB will not permanently store slag or sludge at its facility. Once high value metals are recovered, the sludge will be returned to the slag supplier for storage and final disposal in line with the national law and standards. BMB will review the licenses and permits of slag suppliers as part of its E&S and Compliance due diligence to ensure compliance with national law for slag disposal.
As part of the radioprotection program, BMB has developed a Slag and Radioactive Waste Management Plan following National Nuclear Energy Commission (CNEN) regulations. Elements potentially contaminated with radionuclides such as filters will be reprocessed and incorporated into the slag. As part of ESAP #13, BMB will supplement its E&S and Compliance due diligence process by commissioning an independent third party to perform characterization of slag prior to the start of the contractual relationship with slug owner, ensuring that the slag with hazardous characteristics is not processed.
PS-4 Community Health, Safety and Security Personnel
BMB facilities are located 3.5km from the urban center of the municipality Coronel Xavier Chaves, and 14km away from Sao Joao del Rei.
During the final phase of the pilot program, in average one truck per month transported slag to BMB ’s pilot plant. An average of one truck per day will be required for Phase I and four trucks per day for Phase II. After recovery, residual materials will be returned to Boston Metal’s partner.
BMB has established a Safe Transportation Procedure for slag, including guidelines on handling, transportation, labeling, monitoring, emergency protocols, training requirements and quality assurance measures such as inspections. The procedure was approved by the National Nuclear Energy Commission (CNEN) in January 2025 and has a five-year validity. Transportation will be carried out by companies that are qualified for the transport of dangerous goods and approved by CNEN. Drivers will be required to undergo training on the operational movement of hazardous materials (MOPP for its Portuguese acronym) which focuses on safety regulations and emergency procedures. All trucks will have GPS, allowing real time monitoring during transport. Travel routes will be selected with emergency response considerations such as availability of resources, and each trip will need to fill a transport manifest. Emergency protocols outlined in the document include scenarios such as collisions or rollovers with leaks or fires and define the procedures that should be followed to ensure safety. Further, transport companies will be required to have a contract with a third party specializing in emergency response.
As per ESAP #14, BMB will appoint a transport coordinator at the partner’s facility to ensure compliance with the safe transportation procedure during slag shipment.
Security personnel. BMB engages the services of armed security forces for its facilities in Brazil and has developed a Security Management Plan per national law that outlines the responsibilities of guards. As per ESAP #15, BMB will update its plan, in line with PS4 and the IFC Good Practice Handbook on the Use of Security Forces, including procedures for the use of force and firearms and implementation of good practice in hiring, training, and employment of private security forces. No incidents involving communities have occurred in the past years.
PS6 - Biodiversity Conservation and Sustainable Management of Living Natural Resources
Situated in a predominantly agricultural landscape of the Cerrado Terrestrial Ecoregion, the 20.04 ha project area contains a mosaic of Modified and Natural Habitats (NH), including patches of degraded open savanna and secondary growth semidecidual forest. It is located within 5 km of the Environmental Protection Area Serra de São José (IUCN Category V), which overlaps the Wildlife Refuge Libélulas da Serra de São José (IUCN Cat. III), and within a buffer zone of the Atlantic Forest Biosphere Reserve (UNESCO MAB) that surrounds these protected areas.
The industrial plant facilities will occupy part of a 20.02-hectare property, with approximately 5.56 hectares designated as the operational area and 13,681 m² of built structures. Vegetation suppression was authorized for 10.8 hectares, composed mainly of degraded open savanna (Cerrado stricto sensu) and a 1.2-hectare patch of forest in an intermediate stage of regeneration. Additionally, 154 isolated trees were removed along 1.3 km of the adjacent access road to allow for the installation of a 138 kV transmission line, connecting the plant to the power grid. As part of the mitigation and compensation measures required by environmental authorities, Boston Metal is rehabilitating erosional areas, controlling invasive exotic species, and improving habitat quality through the planting of native seedlings. PS6 No Net Loss requirement is deemed met. Additionally, since 2024 BMB has engaged with administrative authorities of the neighboring protected areas in the Minas Gerais State Institute of Forests (IEF) to enhance their conservation objectives, by fostering initiatives focused on biodiversity conservation and environmental education.
Measures for the protection of avifauna were implemented throughout the development of the 138kV TL, with the aim of avoiding any disturbance to the local wildlife. Collision mitigation technologies, such as strategically positioned marker spheres, were implemented, along with planning of the transmission line route to avoid areas sensitive to bird presence. Further, dielectric insulators were installed to prevent electrocution.
Supply Chain. BMB industrial processes will require up to 2.700 m3 of charcoal annually, to be sourced from third party Eucalyptus plantations in neighboring municipalities - most likely in São João Del Rei, Carrancas, Luminárias, Carandaí and Ritápolis, which concentrate the largest plantation forestry areas within a ~100 km radius. While significant forest habitat conversion in the region is considered unlikely given legal requirements, open savanna is susceptible to afforestation and has shown consistent decline in some of these municipalities along the last decade. Therefore, as indicated under PS1, BMB will supplement its Code of Conduct with specific provisions regarding the sourcing of charcoal and conduct verification of its charcoal sourcing (i.e.purchase of cerfitied product) to ensure that products are traceable to origin and do not entail conversion of Natural Habitat by experienced professionals, covering all production areas. (ref. ESAP #4).
