S
T
N
E
T
N
O
C
03
08
09
09
16
18
19
20
22
23
25
26
27
27
28
30
letter from the president
about gr up o méxico
INTRODUCTION TO GRUPO MÉXICO
OUR PRESENCE
CORPORATE STRUCTURE
MISSION, VISION AND VALUES
CORPORATE GOVERNANCE
GOVERNANCE BODIES
ETHICS AND INTEGRITY
DILIGENCE IN HUMAN RIGHTS
our sustainable approach
SUSTAINABILITY STRATEGY
RECOGNITIONS
RELATIONSHIPS WITH OUR STAKEHOLDERS
COMMUNICATION AND FEEDBACK WITH
STAKEHOLDERS
SUPPORTING OUTSIDE INITIATIVES AND
ASSOCIATIONS
31
GENERATING SHARED VALUE
gr upo méxico foundation
HEALTH TRAIN
33
34
35
EDUCATION
39
THE ENVIRONMENT
41
CONCIENCIA CINEMEX
43
SUPPORT FOR INSTITUTIONS
46
RED DE ASOCIACIONES Y FUNDACIONES
EMPRESARIALES
47
SOCIAL LINKAGE
m i n i n g d i v i s i o n
GROW
STRUCTURE OF THE DIVISION AND
PRINCIPAL SUBSIDIARIES
SIGNIFICANT CHANGES IN THE
ORGANIZATION
PRINCIPAL PRODUCTS AND MARKETS
INVESTMENTS AND PROJECTS
EXPLORATIONS
CUSTOMER RELATIONS
PROMOTE
WORKFORCE AND LABOR PRACTICES
TRAINING AND CAREER DEVELOPMENT
OCCUPATIONAL HEALTH AND SAFETY
48
49
49
49
49
52
54
55
56
56
62
65
70
COMMUNITY DEVELOPMENT
PROTECT
118
119
119
119
121
122
i n f r a s t r u c t u r e
d i v i s i o n
GROW
STRUCTURE OF THE DIVISION AND
PRINCIPAL SUBSIDIARIES
PRINCIPAL SERVICES AND MARKETS
INVESTMENTS AND PROJECTS
CUSTOMER RELATIONS
123
PROMOTE
123
126
128
130
WORKFORCE AND LABOR PRACTICES
TRAINING AND CAREER DEVELOPMENT
OCCUPATIONAL HEALTH AND SAFETY
COMMUNITY LINKAGE
134
PROTECT
134
ENVIRONMENTAL MANAGEMENT AND
PERFORMANCE
76
76
77
85
86
87
88
88
89
90
91
93
94
94
98
99
MANAGEMENT APPROACH
139
COMPLIANCE
ENVIRONMENTAL MANAGEMENT AND
PERFORMANCE
CLOSURES
COMPLIANCE
t r a n s p o r tat i o n d i v i s i o n
GROW
140
independent assurance
report
144
gri con tent i ndex
STRUCTURE OF THE DIVISION AND
PRINCIPAL SUBSIDIARIES
SIGNIFICANT CHANGES IN THE
ORGANIZATION
PRINCIPAL SERVICES AND MARKETS
INVESTMENTS AND PROJECTS
CUSTOMER RELATIONS
PROMOTE
WORKFORCE AND LABOR PRACTICES
TRAINING AND CAREER DEVELOPMENT
OCCUPATIONAL HEALTH AND SAFETY
104
COMMUNITY LINKAGE
111
PROTECT
111
ENVIRONMENTAL MANAGEMENT AND
PERFORMANCE
117
COMPLIANCE
LETTER FROM THE PRESIDENT
L E T T ER FROM T HE P R E S I DEN T
G4-1, G4-2
At Grupo México, sustainable development is at the core of our business model. Our work strategy is
These losses had a profound impact on families, friends, colleagues, and on all Grupo México. We
based on three pillars: GROW, PROMOTE and PROTECT. This means creating value, fostering wellbe-
share in the grief of their families and we affirm the commitment of our whole organization to prevent
ing and protecting the environment.
further fatalities. We need to ensure our people will get home safely. Nothing is more important.
For the last 12 years, we’ve reflected our vision of sustainability through our annual Sustainable De-
There is still much to do to reach our goal of ZERO ACCIDENTS. However, we’ve made progress and
velopment Report prepared according to an internationally accepted methodology: Global Reporting
our efforts have brought reduced occupational incident rates across the board in recent years. In all
Initiative. This report has served as a tool for transparency and self-assessment by which we are able
cases, we’re below the industry averages in each of the countries where we have operations. Safety is
to communicate our progress and identify areas of opportunity.
the responsibility of everyone at Grupo México, therefore we continue the ongoing task of identifying
The results of the economic, environmental, social and corporate governance strengthening of our
company are reflected in various assessment processes. For the seventh year, we are included in the
risks and preventing accidents.
Strengthening partnerships
Mexican Stock Exchange (BMV) IPC Sustainability Index and, for the first time this year, the S&P Dow
All our Mining Division investment projects, from the outset strive to create jobs and opportunities for
Jones Sustainability MILA Pacific Alliance Index (DJSI MILA).
people from our neighboring communities. With our program ‘Forjando Futuros’ (Forging Futures) in
Peru, we offer training to residents in the places where we operate. We have trained nearly 500 peo-
We have been mining and driving development for over a century, conscious that growth and tech-
ple in different trades and over 400 youth have had the opportunity to gain work experience through
nological advances depend on the metals that we mine. Since our origins, we’ve followed criteria of
professional practices with our affiliate, Southern Copper.
sustainability, which today we integrate into a common vision of sustainable development. We’re com-
mitted to making this a safe and sustainable industry.
Safe families
People are our backbone. Their wellbeing and safety are our top priority. We know that a collaborator
in a safe environment means a safe family. Because of this, our goal is ZERO ACCIDENTS. Four
4
collaborators lost their lives on the job in 2017, three in the Mining Division as a result of accidents
occurring in Mexico, Peru and the United States; and one in the Transportation Division, in a regret-
table incident in Mexico.
5
SUSTAINABLE DEVELOPMENT REPORT 2017 Together with our employees, communities, suppliers and government agencies, we
continue to grow. In 2017, we completed major projects to boost the social and
economic development of Mexico, Peru and the United States. These investments,
added to those made in the last five years, total US$13.80 billion. We have also made
voluntary investments totaling US$322 million in community development, health,
training, infrastructure and services.
In the communities where we operate, we promote the development of social capital
through a model that we call ‘Casa Grande’ to connect us with our people. Casa
Grande are community centers where we offer various programs and promote the
participation of charity organizations. Also, thanks to Grupo México Foundation with
the support of the Transportation Division, we have been able to offer healthcare ser-
vices through Dr. Vagón, a mobile clinic that serves communities along the railroad
line free of charge. Dr. Vagón is a project without precedent in the Americas that has
contributed significantly to improving the health and quality of life of people living in
the most remote communities in Mexico. In 2017, we provided 266,440 comprehen-
sive medical services.
Long term vision
We believe that sustainability must be present throughout the life of a project. In
close coordination with the authorities, we dismantled a smelter in San Luis Potosi
that had been in operation for more than a hundred years. This process involved in
6
situ confinement of the waste and the removal of affected soils. The result was the
remediation of 192 hectares of industrial land, which can now be zoned for urban
developments and green spaces. This project is clear evidence as to how responsible
mining can leave a positive mark.
LETTER FROM THE PRESIDENT
For Grupo México, sustainable development is also the way to face climate change.
Our strategy in this sense has three lines of action: using energy more efficiently,
developing and consuming renewable energies, and fostering the capture of green-
house gases. In the Mining Division, from 2014 to 2017, we reduced the emissions
and the energy needed to produce a ton of copper. By consuming clean and renew-
able energy produced by our Infrastructure Division, we prevented the emission of
559,866 tons of CO2eq, equal to taking 119,886 cars off the road for a year.
Facing these challenges has been possible thanks to the efforts, talent and dedication
of our collaborators, as well as teamwork with authorities and various stakeholders.
We have brought leadership, experience and values together to consolidate a vision
that affirms our commitment to economic and social growth; and also to caring for
the environment, the communities and the countries where we operate.
Regards
7
GERMÁN LARREA MOTA VELASCO
CHAIRMAN OF THE BOARD
SUSTAINABLE DEVELOPMENT REPORT 2017 ABOU T GR UPO
M ÉX IC O
ABOUT GR UPO MÉXICO
IN T ROD U C T I ON TO G RU P O MÉ X I C O
G4-3, G4-4, G4-5, G4-7
We are a diverse group of companies, with mine operations in Mexico, Peru and the
United States, positioning Grupo México as the fourth largest copper producer in
the world. We operate the largest multimodal freight railroad service in Mexico, with
increasingly greater presence in the United States. We also offer engineering and
construction services, power generating, onshore and offshore drilling, including the
leasing and operation of oil rigs. To this, we have added the operation of highways
under concession.
The diversification of operations is achieved under a joint approach of cost efficiency
and productivity to ensure financial balance so as to follow a sustainable path, in syn-
ergy with creating value for our stakeholders. We are committed to Development with
Purpose, with which we contribute to the health and safety of our collaborators, to
strengthening the communities that embrace us, and to caring for the environment.
We have been trading on the Mexican Stock Exchange since 1966 as Grupo México
(GMEXICOB) and since 2017 through GMéxico Transportes (GMXT). Our subsidiary
Southern Copper Corporation (SCC) trades on the New York Stock Exchange and the
Lima Stock Exchange.
OU R P R E SENC E
G4-6, G4-8
Our portfolio of products and services is delivered by three divisions: Mining Division,
9
Transportation Division and Infrastructure Division. Our presence in Mexico, Peru, the
United States, Argentina, Chile, Ecuador and Spain is shown following:
SUSTAINABLE DEVELOPMENT REPORT 2017ABOUT GRUPO MÉXICO 3
1
2
7
11
12
4
5
6
8
9
10
13
15
14
18
19
17
16
20
21
22
23
GULF OF
MEXICO
GEOGRAPHIC LOCATION
MINING DIVISION−GRUPO MÉXICO
PACIFIC
OCEAN
LOCATION
ASARCO
RAY - SX/EW COPPER MINE
HAYDEN - COPPER SMELTER
AMARILLO - COPPER REFINERY
SILVER BELL - SX/EW AND MINE
TUCSON - US OFFICE
MISSION - COPPER MINE
1
2
3
4
5
6
10
MINERA MÉXICO
AGUA PRIETA - LIME PLANT
EL PILAR - SX/EW COPPER PROJECT
BUENAVISTA DEL COBRE - SX/EW AND MINE
BUENAVISTA ZINC - MINE
LA CARIDAD - MINE, SX/EW METALLURGIC COMPLEX
PILARES - COPPER PROJECT
SANTA EULALIA - POLYMETALLIC UNDERGROUND MINE
EL ARCO - SX/EW AND COPPER MINE PROJECT
SANTA BARBARA - POLYMETALLIC UNDERGROUND MINE
NUEVA ROSITA - COAL AND COKE
CHALCHIUITES - UNDERGROUND MINE PROJECT
SAN MARTIN - POLYMETALLIC UNDERGROUND MINE
CHARCAS - POLYMETALLIC UNDERGROUND MINE
SAN LUIS POTOSI - ZINC REFINERY
ANGANGUEO - UNDERGROUND MINE PROJECT
TAXCO - POLYMETALLIC UNDERGROUND MINE
MEXICO CITY - CORPORATE OFFICES
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
AMC
AZNALCOLLAR, SPAIN - POLYMETALLIC UNDERGROUND MINE
SPCC
CHAUCHA - COPPER PROJECT
TANTAHUATAY - GOLD MINE
LIMA - CORPORATE OFFICES
LOS CHANCAS - COPPER PROJECT
TIA MARIA - SX/EW COPPER PROJECT
CUAJONE - COPPER MINE
TOQUEPALA - SX/EW AND COPPER MINE
ILO - METALLURGIC COMPLEX
CATANAVE - COPPER PROJECT
LEGEND
MINES
PLANTS
OFFICES
FUTURE MINE PROJECTS
*SX/EW (Copper Solvent Extraction and Electrowinning plant)
11
SPAIN
24
ECUADOR
25
26
27
PERU
28
29
30
31
32
CHILE
33
SUSTAINABLE DEVELOPMENT REPORT 2017 1
Mexicali
Pascualitos
2
Nogales
3
El Paso
Cd. Juarez
Sierra Blanca
Rustler
Springs
Sweetwater
Coleman
San Angelo J.C.T.
Ft. Worth
Cresson
Gorman
Comanche
4
Ricker
Brownwood
5
Dallas
Cleburne
Granbury
Dublin
Longview
Benjamin Hill
Hermosillo
Guaymas
Topolobampo
Sufragio
Ft. Stockton
Alpine
Ojinaga
Presidio
Chihuahua
Piedras Negras
San Angelo
Austin
San
Antonio
Spofford
6
Eagle Pass
Corpus Christi
Laredo
College
Station
Houston
Galveston
Cd. Frontera
Cd. Frontera
Paredon
Culiacan
Torreon
R. Arizpe
Monterrey
GEOGRAPHIC LOCATION
TRANSPORTATION DIVISION−GRUPO MÉXICO
Connections:
12
UP
1
UP
2
BNSF / UP
3
BNSF / FWWR
4
BNSF / FWWR BNSF / UP
5
BNSF / UP
6
BNSF / CN / CSX / NS
7
CSX / NS
8
Cd. Victoria
Mazatlan
Zacatecas
Aguascalientes
Tepic
Guadalajara
Silao
Celaya
Penjamo
Irapuato
Rail Ferry
Altamira
Tampico
Colima
Ajuno
Mexico
City
Veracruz
Coatzacoalcos
Manzanillo
Puebla
Sanchez
Salina Cruz
7
Pensacola
8
Jacksonville
Titusville
Orlando
Canaveral
Tampa
West
Palm
Beach
Palm Beach
Everglades
Miami
Ferromex
Ferrosur
13
Texas Pacífico
Florida East Coast
Kansas City Southern
Trackage rights
SUSTAINABLE DEVELOPMENT REPORT 2017
1
2
GEOGRAPHIC LOCATION
INFRASTRUCTURE DIVISION−GRUPO MÉXICO
ASSETS
CANANEA
500 MW COMBINED CYCLE PLANTS
MONTERREY
GUADALAJARA
LEON-SALAMANCA HIGHWAY
1
2
3
4
5
14
6
15 IRAPUATO
7
8
9
10
11
12
ONSHORE DRILLING POZA RICA, VERACRUZ
CORPORATE OFFICES, MEXICO CITY
EL RETIRO, WIND FARM, 74 MW
“TAMAULIPAS” RIG
“VERACRUZ” RIG
“SONORA” RIG
11 “TABASCO” RIG
13
14
“ZACATECAS” RIG
13 “CAMPECHE” RIG
15
16
17
“CHIHUAHUA” RIG
OFFSHORE DRILLING CD. DEL CARMEN, CAMPECHE
PACIFIC
OCEAN
LEGEND
PEMSA
MGE
MCC
HIGHWAY
3
8
7
4
5
6
GULF OF
MEXICO
9
16
15
14
17
13
12
11
10
15
CENTRAL AMERICA
SUSTAINABLE DEVELOPMENT REPORT 2017 C OR P OR AT E S T RU C T U R E
G4-17
The corporate structure of Grupo México is based primarily on three divisions: Mining, Transportation and Infrastructure:
DIVISION
MINING DIVISION -
SUBSIDIARIES & AFFILIATES
Southern Copper Corporation
DIMENSIONES
- 15 underground and open pit mines
AMERICAS MINING
- Minera México
- 52 smelters, refineries and other plants
CORPORATION (AMC)
- Southern Peru
- 13 explorations
ASARCO (USA)
- Mexico, Peru, USA, Argentina, Chile,
Minera Los Frailes (Spain)
Ecuador and Spain
- 15,672 employees
ABOUT GR UPO MÉXICO
GRUPO MÉXICO
HAS BEEN
TRADING SINCE
1966
AMERICAS MINING
CORPORATION (AMC)
100%
GRUPO MÉXICO TRANSPORTES
16.6%
70%
13.4%
Private
investment
MÉXICO PROYECTOS
Y DESARROLLO (MPD)
100%
TRANSPORTATION
Ferromex
DIVISION - GMÉXICO
Ferrosur
- 2.7 million horsepower
- 11,146 km rail network
TRANSPORTES, S.A.B.
Intermodal México
- Fleet of 862 locomotives and 34,380 cars
DE C.V. (GMXT)
Florida East Coast Holding Corp.
- 11,230 employees
Texas Pacífico
Southern
Copper
Corporation
ASARCO
(USA)
Minera
Los Frailes
(Spain)
FERROMEX
FERROSUR
IMEX
Perforadora
México
México
Compañía
Constructora
Grupo México
Servicio de
Ingeniería
88.9
100%
97.3
74%
100%
100%
100%
100%
100%
11.1%
Private investment
26%
DINFRASTRUCTURE
México Compañía Constructora
- 2 modular rigs
DIVISION -
Grupo México Servicios de Ingeniería
- 5 jack-up rigs
MÉXICO PROYECTOS
Perforadora México
- La Caridad combined cycle power
Y DESARROLLOS,
Grupo México Energía
plants (516 MW)
16
S.A. DE C.V. (MPD)
Grupo México Autopistas
- El Retiro wind farm (74 MW)
- High-specification highways (construction,
operation and maintenance)
- 3,362 employees
Minera
México
Southern
Perú
Texas
Pacífico
100%
Florida
East
Coast
100%
Grupo
México
Energía
100%
Grupo
México
Autopistas
100%
17
Among the largest
Leading transport
producers of copper,
company in Mexico, with
Over 80 years
experience in
molybdenum, silver and
the largest coverage and
infrastructure and
zinc worldwide. Largest
connectivity.
construction projects.
copper reserves
in the world.
SUSTAINABLE DEVELOPMENT REPORT 2017
M I S S I ON, V IS I ON A ND VA L U E S
G4-42, G4-56
At Grupo México, we operate our business according to our Mission, Vision and Values, which establish the focus for our
relationships with our stakeholders and are outlined in the corporate policies of Grupo México, approved by the Board
of Directors.
Mission. To meet the needs of our markets through large scale and long term projects, staying on the cutting-edge in
technology, and always committed to our people, the environment, our values and our social responsibility, maximizing
the generation of value for our stockholders.
Vision. To be the world leader in efficiency and profitability in our areas of business, prioritizing people and their com-
prehensive development, guaranteeing the sustainability of our operations.
OUR VALUES
Honesty
Respect
Responsibility
Acting with integrity, professional
For all persons, laws and
Meeting our commitments
ethics and ongoing improvement.
the environment.
with results.
18
C OR PO R ATE
G OVER N ANCE
CORPORATE GOVERNANCE CORPOR ATE GOVERNANCE
G4-34, G4-35, G4-36, G4-37, G4-38, G4-39, G4-40,
The Stockholders’ Meeting also appoints the members of
Each subsidiary also has management committees,
Internal control. Grupo México has an internal control
the Board of Directors, the Executive Committee, and the
which address the different evaluation indicators and
system to ensure its corporate governance is managed
G4-42, G4-43, G4-44, G4-45, G4-46, G4-47, G4-49,
Audit and Corporate Practices Committee, considering their
stakeholder concerns, raised by the executives in charge
appropriately. According to the guidelines of the Board
G4-50, G4-51, G4-52, G4-53
experience and the absence of conflicts of interest. The
of relations. The committees and board members under-
of Directors, the company’s administrative organization
Meeting also sets the remunerations for board members.
go an annual review through a self-assessment process.
regularly and strictly measures and reviews the internal
The Grupo México corporate governance structure seeks
control system, covering budgetary, economic, financial,
to ensure that our procedure for strategic decision-mak-
The board of directors met four times in 2017. During these
It’s important to note that our principal subsidiaries have
equity, regulatory and management aspects.
ing generates value for investors and all our stakeholders.
sessions, information was presented on the results of the
their own boards of directors, which inform the Grupo
This structure is characterized by its risk management
company’s principal financial and operational indicators,
México board. Their responsibilities include monitor-
There is also an ongoing improvement process that
processes, transparency and accountability.
the status of the risk management, and the performance
ing and assessing the social and environmental perfor-
strives to make the operational, financial and admin-
G OV ER N A N C E BOD IE S
Board of Directors. The board of directors is the gover-
of the principal social and environmental indicators.
mance, the management of which falls to collaborators
istrative processes more efficient, strengthen and
in the operational areas at the subsidiary level and also
making more transparent the disclosure of informa-
Committees. The Grupo México corporate governance
teams created for this purpose.
tion to stockholders.
CORPORATE GOVERNANCE
ning body of Grupo México, setting the corporate strategy
structure has two committees: the Executive Commit-
and reviewing performance. Its functions include ensu-
tee and the Audit and Corporate Practices Committee.
ring the efficient use of resources and available assets,
The members of these committees are appointed by the
monitoring the social and environmental performance of
stockholders’ meeting, considering absence of conflicts
the company, and overseeing risk management.
of interest and the experience of the board members.
In 2017, there were 15 members of the Grupo México
Three of the four board members that sit on the Executive
Board of Directors, appointed by the General Stockhold-
Committee are independents. This committee provides
ers’ Meeting, 9 of which were independents. The chair-
more frequent supervision and prepares the quarterly re-
STOCKHOLDERS’ MEETING
BOARD OF DIRECTORS
man of the board also holds the position of Executive
port presented to the board.
EXECUTIVE COMMITTEE
AUDIT & CORPORATE
PRACTICES COMMITTEE
President of Grupo México.
The Audit and Corporate Practices Committee is com-
The governance structure is defined according to the
prised of independent board members. This committee
20
guidelines established in the Grupo México bylaws,
monitors the internal control and audit systems, con-
approved by the stockholders’ meeting, which is re-
ducting regular reviews, and is also responsible for due
sponsible for the final approval of the management
diligence on the implementation of and compliance with
reports presented by the board of directors. The hold-
the ethical guidelines laid out in the Code of Ethics. This
ers of Grupo México shares are represented at the
committee also sets the fixed salary policies for senior
stockholders’ meeting.
management, and the variable portion of these salaries
based on performance.
AMC
BOARD OF DIRECTORS
GMXT
BOARD OF DIRECTORS
MPD
BOARD OF DIRECTORS
21
AMC PRESIDENT & CEO
GMXT PRESIDENT & CEO
MPD PRESIDENT & CEO
SUSTAINABLE DEVELOPMENT REPORT 2017 CORPORATE GOVERNANCE
E T H I C S A ND IN T EG R I T Y
G4-41, G4-56, G4-57, G4-58, G4-SO3, G4-SO4, G4-SO5
Code of Ethics training. Our collaborators receive the
is also responsible for overseeing its enforcement. All
We base our activities on principles of respect and in-
Code of Ethics when they join the company and they are
Grupo México subsidiaries are subject to this policy.
clusion and we reject any form of violation of the rights
required to sign a letter of agreement confirming they
of people, including child exploitation and forced labor,
Our values
have read and understood the document, making the
Anticorruption. Regarding the prevention of acts of
and also any form of discrimination. Grupo México is
Code of ethics. To maintain our high level of integrity,
commitment to observe it. Collaborators also receive
corruption, all our collaborators receive training to con-
committed to equal opportunity and we do not discrimi-
Grupo México has policies, procedures and a code of
training in the Code, when there are revisions or to rein-
duct themselves ethically. Guidelines for analysis and
nate on the basis of ethnic origin or nationality, gender,
ethics in place that, together, outline and reflect the
force their understanding. Code of Ethics training was
resolution are applied when any act of corruption is
age, disability, social condition, political affiliation, health
company’s values, principles and rules of conduct.
given to 1,051 new Grupo México collaborators in 2017.
suspected, determining the corresponding actions to
condition, religious beliefs, immigration status, personal
take. Any supplier or contractor suspected of engaging
opinion, sexual preference or marital status. All the abo-
The Code of Ethics is the guiding document that de-
Reporting mechanisms. At Grupo México, we promo-
in illicit practices or corruption will be submitted to a
ve are covered in our Code of Ethics and we monitor due
fines the guidelines of conduct under a framework of
te an environment of trust that facilitates reporting and
review process to consider their continuation or to end
diligence in compliance within the company.
legality, professionalism, ethics and transparency for
taking action on illegal practices and infractions of our
our commercial relationship with them.
our activities as botha individuals and as a team. The
guidelines. We have established the following repor-
The Code of Ethics establishes reporting mechanisms
scope of the code of ethics guidelines includes our
ting mechanisms to promptly report any violation of the
Five cases of practices contrary to our anticorruption
and also that under no circumstance will retaliation be
collaborators, representatives and any person who
Code of Ethics:
and conflict of interest guidelines were reported this
taken against anyone who, in good faith and honest-
acts on behalf of Grupo México and its subsidiaries
• Direct communication with the corresponding
year. In the cases where breach of trust was proven,
ly, raises, facilitates or addresses a concern or report
in Mexico and overseas. We also extend the Code of
immediate supervisor, manager or director, or
the employees involved were dismissed.
involving compliance with the document or any other
Ethics to our board members, suppliers of goods and
through the Human Resources, Internal Audit or
company policy.
services, and contractors, with recommendation for
Legal departments at each subsidiary.
its implementation and observance, actions that be-
come a criterion for selection and continuance in our
• Reporting line managed by a third party, which
D I L I G ENC E IN H U M A N
R I G H T S
G4-HR1, G4-HR2, G4-HR4, G4-HR5, G4-HR6, G4-HR7,
At Grupo México, we not only work to ensure that res-
pect for human rights is present in our decision making
supply chain.
includes a telephone number, email and website.
G4-HR8, G4-HR9, MM5, MM6, MM7, MM8, MM9
and in how we operate, we also promote awareness
22
The Grupo México Code of Ethics is a public document
The Ethics and Discipline Committee and/or audit de-
Management. At Grupo México, we have a permanent
customers, suppliers and contractors.
and may be consulted on the Grupo México website.
partments corresponding review the reports received.
commitment to our people, strengthening our organi-
Among other topics, the Code of Ethics covers preven-
zational and labor culture, the environment and society.
Human rights training. It’s important to note that our
ting conflicts of interest, non-discriminatory and fair la-
Conflicts of interest. Grupo México has a conflict of
This commitment means respecting human rights as
collaborators receive training on the Code of Ethics
bor practices, protecting human rights, zero tolerance
interest policy, approved by the Board of Directors, which
fundamental, according to the United Nations Universal
every two years, including human rights topics. In
23
of these issues throughout our value chain, including
to harassment in any form, fair competition, protecting
information, respecting the communities we join and
the environment, among others.
Declaration of Human Rights, in compliance with the
2017, a total of 2,673 training hours were provided in
laws of the countries where we operate.
this area.
SUSTAINABLE DEVELOPMENT REPORT 2017 Of note are our efforts to train our in-house securi-
Respect for human rights in the countries where
ty personnel on the protection and defense of human
we operate. To ensure respect for human rights ex-
rights. Also, the employees of all the private security
tends throughout our value chain, meaning customers,
firms with which we have relations receive training and
suppliers and contractors, we have contract clauses in
refresher training in this area.
place requiring regulatory compliance in this area in
the countries where we operate.
Respect for labor rights. Under the framework of res-
In Peru, our contracts contain clauses that define hu-
pect for the rights of our collaborators, at Grupo México
man rights acts and obligations for each of the parties
we adhere to the principles of the International Labor
involved, including non-discrimination and ensuring no
Organization’s Declaration on Fundamental Principles
child exploitation or forced labor.
and Rights at Work. Therefore, we support freedom of
association and adhere to the terms agreed to in the
In the United States, our Mission mine borders the To-
collective bargaining agreements.
hono O’dham Native American Reserve. We respect
the rights of the people living on the reserve and as
All our collaborators are guaranteed access to social
part of the lease, preference is given to hiring people
security, to receive a salary, ongoing training to increa-
from this indigenous community.
se productivity with shared benefits, and to optimal
health and safety conditions to prevent workplace risks.
During 2017, no dispute was reported involving the
use of indigenous lands, the rights of indigenous com-
In Mexico, the requirements related to social security
munities or peoples, in relation to the operations of
for our collaborators as set by the Federal Labor Law,
Grupo México.
the Social Security Law and the National Workers’
Housing Fund Law, among others, are incorporated
into our agreements.
24
O UR
SUSTA IN ABLE
A PPR OA CH
OUR SUSTAINABLE APPROACH SUS TA IN A B I L I T Y S T R AT EGY
R EC OG N I T I ONS
At Grupo México, we’ve created a corporate strategy of sustainability, which permeates our divisions and subsidiaries.
Our strategy, “Development with Purpose”, stands on the following three key pillars:
DEVELOPMENT WITH PURPOSE
We invest to generate opportunities and prosperity, therefore we are an engine for positive change for
the economies in which we operate.
• We ensure our continuity, adapting to the needs of our surroundings.
• We encourage communities to participate in the growth, promoting partnerships with suppliers, working
with local suppliers as much as possible.
• We operate with transparency, thanks to timely communication with our stakeholders.
• Our structure is process and result-oriented.
We strive to be good neighbors, improving the quality of life of our people and that of our communities.
• Our teams are made up of capable, motivated people, in keeping with our values, putting the dignity of the
individual at the center of all that we do.
• We create safe work environments for our collaborators and we operate to the highest standards of occu-
pational health and safety.
• We are continually building a work environment where respect, non-discrimination and equality are the norm.
• We are working to contribute to the common good of our neighbor communities, fostering collaboration
and dialog.
W
O
R
G
E
T
O
M
O
R
P
26
T
C
E
T
O
R
P
We care for and work to preserve the environment. To build shared value, we know that leaving posi-
tive footprints environmentally is the basis for sustainable progress.
• We mitigate our negative impacts to contribute to the national and international environmental goals.
• We have established an ongoing improvement process that ensures efficiency and responsible usage in the
consumption of raw materials, energy and water.
• We manage our operations focusing on reducing waste and controlling emissions.
• We respect and protect the biodiversity of the environment where we operate.
Sustainability index – DJSI MILA. There is in-
creasing interest among investors in the current global
trend of corporate sustainability. In this regard, Grupo
México is proud to report that on October 18, 2017, Gru-
po México S.A.B. de C.V. was selected to join the S&P
Dow Jones Sustainability Indices MILA Pacific Alliance
(DJSI MILA). This regional sustainability index included,
for 2017, 42 leading companies in sustainability from the
countries that form part of the Pacific Alliance: Mexico,
Chile, Colombia and Peru.
The DJSI MILA is part of a family of 8 Dow Jones sustain-
ability indexes, which are recognized at the global level as
the highest references used by investors who consider
sustainability factors in their investment decisions.
IPC sustainable. In 2017 Grupo México remained on
the list of the 30 companies that comprise the Mexican
Stock Exchange (BMV) sustainability index. The IPC
Sustainability Index is a financial indicator that recog-
nizes companies committed to best practices in envi-
ronmental, social and corporate governance aspects.
This is the seventh year that Grupo México has been
included in this index.
ESR Distinction. The five companies of our Infras-
tructure Division received for the 1st time in 2017, the
distinction as socially responsible companies (ESR in
Spanish), awarded by the Centro Mexicano para la Fi-
lantropía (CEMEFI), joining Ferromex and Ferrosur which
OUR SUSTAINABLE APPROACH
have been ESR recognized since 2015. This represents a
recognition of our actions to improve the quality of life in
the company, corporate ethics, linkage with the commu-
nity, care and preservation of the environment, and social
responsibility management.
R E L AT I ONS W I T H
O U R S TA K EHO L DERS
G4-24, G4-25, G4-26, G4-27
At Grupo México, we believe that generating value de-
pends, to a large extent, on ongoing involvement with our
stakeholders.
The participation of stakeholders makes our manage-
ment approach better in terms of the most important
issues for each of our sectors. Better initiatives and pro-
grams translate into more successful results in terms of
economic, environmental and social performance.
To hear the concerns and expectations of our stakehold-
ers, we have set up channels for dialog and communica-
tion, according to the needs of our communities, including
them, directly or indirectly, in the decision-making for our
Development with Purpose strategy.
27
Through various channels and mechanisms, we seek
open and transparent communication with our stake-
holders, particularly those that are most vulnerable,
building a culture of collaboration and sustainability in
benefit of everyone.
SUSTAINABLE DEVELOPMENT REPORT 2017 COMMUNICATION AND FEEDBACK WITH STAKEHOLDERS
G4-24, G4-25, G4-26, G4-27
Yearly or Semiannually
Quarterly
Bimonthly
As necessary
s
r
e
m
o
t
s
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C
s
e
e
y
o
p
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o
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e
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p
p
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t
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o
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o
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i
s
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t
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e
v
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G
s
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o
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t
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t
s
n
i
i
c
m
e
d
a
c
A
i
s
e
c
n
e
g
a
s
g
n
i
t
a
R
s
n
o
i
t
u
t
i
t
s
n
i
l
i
a
c
n
a
n
F
i
•
•
Ongoing
Yearly
COMMUNICATION
CHANNELS OR
MECHANISMS /
STAKEHOLDERS
Website
E-Ferromex; E-Ferrosur
Intranet
Sustainable Development Report
Annual financial report
Quarterly financial reports
News bulletins
In-house company newsletters
Publication of relevant events
Press releases
Stockholders’ meetings
In-person meetings
CBA review
Diagnostic studies
Interviews
Surveys
28
Workplace climate survey
Telephone consultations
Ethics reporting line
Guided tours
Site visits
Community committees
Awareness days
Community development centers
STAKEHOLDERS
AREA OF INTEREST
OUR SUSTAINABLE APPROACH
Customers
Employees
Unions
Investors
Suppliers
Contractors
Communities
Opinion leaders
Civil society
Media
Financial institutions
Government
agencies
Academic institutions
Ratings agencies
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Quality of products and services
Operational continuity
Market value of products
Ethics and integrity
Salaries and benefits
Occupational health and safety
Internal communication and workplace climate
Recognition
Training and career development
Ethics and integrity
Labor relations
Ethics and integrity
Business strategies and models
Financial results
Share value
Corporate governance practices
Risk management
Ethics and integrity
Contract conditions (payment, termination, etc.)
Financial results
Occupational health and safety (contractors)
Job creation
Quality of life
Operational risk management
Environmental impacts
Community development programs and initiatives
Ethics and integrity
Social and environmental impacts
Financial results
Financial results
Risk management
Risk management
Legal compliance
Social and environmental impacts
Innovation
Business strategies and models
Financial results
Share value
Corporate governance practices
Risk management
Ethics and integrity
Transparency
29
SUSTAINABLE DEVELOPMENT REPORT 2017
SUPPORTING OUTSIDE INITIATIVES AND ASSOCIATIONS
G4-15, G4-16
GENERATING SHARED VALUE
G4-12, G4-EC1, G4-EN31, G4-EN33
Our commitment to sustainable development extends beyond our operations, backing organizations and initiatives seek-
Our Development with Purpose strategy strives to generate direct and indirect pos-
ing synergies between the efforts of the private and public sectors and the civil society, to determine the way forward
itive impacts for our investors and our stakeholders. Our activities foster economic
together in the effort to improve the socioeconomic conditions of our communities and respect for the environment.
spillover, job creation and community development in the regions where we operate,
OUR SUSTAINABLE APPROACH
Division
Association
Mining Division: Global
Mining Division:
United States
of America
Mining Division: Mexico
Mining Division: Peru
30
Transportation Division
Infrastructure Division
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
International Copper Association (ICA)
International Molybdenum Association (IMOA)
International Zinc Association (IZA)
Arizona Mining Association (AMA)
North American Metals Council (NAMC)
Society for Mining Metallurgy and Exploration (SME)
Tucson Metropolitan Chamber of Commerce
Cámara Minera de México (CAMIMEX)
Sociedad Minera de México
Asociación de Mineros de Sonora (AMSAC)
Comisión de Estudios del Sector Privado para el Desarrollo Sustentable
(CESPEDES), Consejo Coordinador Empresarial (CCE)
Sociedad Nacional de Minería, Petróleo y Energía de Perú (SNMPE)
Cámara de Comercio de Lima (CCL)
Asociación de Exportadores (ADEX)
Confederación Intersectorial de Empresas Privadas (CONFIEP)
Sociedad de Comercio Exterior del Perú (ComexPerú)
Instituto de Ingeniero de Minas de Perú (IIMP)
Asociación Mexicana de Ferrocarriles (AMF)
American Association of Railroads (AAR)
The Rail Transportation and Engineering Center (RailTEC)
Asociación de Proveedores de Productos Agropecuarios (APPAMEX)
Asociación mexicana de Transporte Intermodal (AMTI)
Consejo Nacional Agropecuario (CNA)
Asociación Nacional de la Industria Química (ANIQ)
Asociación Nacional del Plástico (ANIPAC)
Comisión Regional de Logística de Guanajuato (CORELOG)
Cámara Mexicana de la Industria de la Construcción (CMIC)
Asociación de Recursos Humanos de la Industria Petrolera (ARHIP)
Asociación Mexicana de Energía Eólica (AMDEE)
improving the quality of life for these residents, including the members of indigenous
and/or marginalized communities.
Supply chain
At Grupo México, we contribute to the development of auxiliary industries in the
different activity sectors where we participate: mining, transportation, energy, con-
struction, engineering and drilling.
When a commercial relationship is established with suppliers and contractors, their
legal compliance is assessed in terms of environmental and labor history; and it’s
important they have the permits required.
We require contractors to have the technical expertise necessary to deliver services
at our sites, which we reinforce with any knowledge that may be specific to our
processes. The assessment of legal compliance with obligations in terms of our prin-
ciples of sustainability is strengthened with the requirement to act according to our
health and safety policies and procedures, and also the Grupo México Code of Ethics.
Also, we seek to strengthen the economy of the regions where we operate and
contribute to their social development, by selecting local suppliers and contractors
according to our criteria of quality, price, and environmental and labor compliance.
31
SUSTAINABLE DEVELOPMENT REPORT 2017 ECONOMIC VALUE GENERATED & DISTRIBUTED
US$ Millions
Economic Value Generated (EVG)
Sales
Economic Value Distributed (EVD)
Operating costs (1)
Salaries, wages and benefits
Financial institutions and stockholders
Government (taxes)
Investments in community development
Total EVD
2015*
2016*
2017
8,179
8,173
9,786
3,667
953
845
1,077
86
6,628
3,653
1,004
677
983
54
6,370
3,911
1,103
1,125
1,648
61
7,848
* Note: The G4-EC1 indicator for previous years is restated to improve adherence to the directives of the Global Re-
porting Initiative.
(1) Does not include personnel costs (salaries, wages and benefits).
ENVIRONMENTAL INVESTMENTS AND IN HEALTH AND SAFETY
US$ Millions
Environmental investments and expenses
Health and safety investments and expenses
2015
236
132
2016
309
138
2017
326
130
32
G R U PO MÉXI CO
FO U NDATION
GRUPO MÉXICO FOUNDATION HEALTH TRAIN
In its three years of operation Dr. Vagón, the Health Train,
has delivered 647,571 free comprehensive medical ser-
vices to 156,951 patients in 122 communities in 22 Mex-
ican states, traveling a total 50,896 kilometers.
In 2017 alone, the Health Train provided 266,440 free
comprehensive medical services to 61,212 patients in
30 communities in 15 Mexican states, traveling a total
15,443 kilometers.
The states visited were: Sonora, Baja California, Chihua-
hua, Coahuila, Tamaulipas, Sinaloa, Nuevo Leon, Zacate-
cas, Nayarit, Jalisco, Michoacan, Guanajuato, Veracruz,
Queretaro, Hidalgo, Estado de Mexico, Puebla, Tlaxcala,
Oaxaca, Colima, and Aguascalientes.
ear and hearing tests and speech therapy; delivering free
hearing devices to 600 people.
In 2017 alone, 25,747 audiology services were provided
and 300 hearing devices fitted.
With the collaboration of ESSILOR since 2015, our
optometry service has conducted 49,992 visual as-
sessments and diagnoses, fitting 18,506 people with
prescription glasses. In 2017, the optometry service con-
ducted 25,506 visual assessments and diagnoses, deliv-
ering 6,604 pairs of glasses to 8,502 people.
In parallel, in its 3 years of operation, the Health Train
has offered 2,759 health education workshops to 95,685
participants. In 2017, we offered 1,028 health education
workshops attended by 45,806 people, focusing on the
Fundación Farmacias del Ahorro has been an essential
following topics:
partner since 2015, delivering 358,103 free medications,
principally for patients with chronic degenerative, infec-
tious-contagious and dermatological diseases to start
• Cancer in men and women
• Teenage pregnancy
timely medical treatment.
34
79,013 free medications were delivered in 2017.
In June 2016, we began a partnership with Fundación
MVS Radio and the program “Ponte Oreja”, through which
37,175 audiology services have been provided, including
• Sex education
• Healthy lifestyles
• Oral hygiene
• Family planning
• Vaccinations
• Respiratory diseases
• Health emergencies
GR UPO MÉXICO FOUNDATION
In February 2017, we added chiropractic and physical
therapy services, attending 5,760 patients who re-
With the support of Cinemex and Ferromex, we creat-
ceived 40,000 services, including neurological, chiro-
ed ‘Cine Vagón’, a unique free entertainment program,
practic and orthopedic assessments, muscle-skeletal
which consists of a train car fitted with screens, the
system diagnoses, manual and mechanical chiropractic
best sound equipment, high definition projectors, com-
adjustments, and physical therapy sessions.
fortable seats and a concession stand. The goal is to
take to magic of the movies to the communities that Dr.
In March 2017, we began a partnership with Lab-
Vagón, the Health Train, visits.
oratorios LAPI to include x-ray services, conducting
18,822 scans.
We enhance the theater experience by handing out free
popcorn and drinks at each showing, as well as healthy
This year, we added a cervical cancer prevention ser-
snacks and treats for children. With the support of part-
vice through our partnership with ONKO Solutions, con-
ner distributors Sony and Videocine, we show movies
ducing cervical screenings and colposcopies for the
portraying universal values and promote families spend-
early detection of cervical cancer in 5,760 women.
ing time together.
Following the September 7, 2017 earthquake, Dr.
During 2017, we held 108 showings, in 30 commu-
Vagón traveled to the Oaxaca communities of Ixtepec
nities, and delivered 12,960 buckets of popcorn to
and Juchitan, where the train stayed for 12 days provid-
22,680 people who enjoyed the magic of the movies in
ing 18,795 emergency services and medical attention
the new ‘Cine Vagón’.
to 5,200 local residents.
Thanks to our partnership with the Universidad Autóno-
EDUCATION
EDUCATIONAL MATERIALS:
35
ma Metropolitana, we operated a training and refresher
EDUCACIÓN PARA LA SALUD Y LA VIDA
program on topics related to the illnesses detected in
The educational materials produced by Grupo México Foun-
the states visited by the Health Train, to raise the cur-
dation are and have been the only such materials approved
ricular level for the Dr. Vagón doctors.
by the Sindicato Nacional de Trabajadores de la Educación
(SNTE) (Mexican Educators Union), making us the only NGO
We set up a toll-free line at 01800 DRVAGON (3782466)
to provide psychological counseling and support, to re-
spond to demand from patients of the Health Train.
SUSTAINABLE DEVELOPMENT REPORT 2017 that has introduced social issues into basic education in Mexico to offer children and youth a more
integral curricula. These materials have been provided to 220,000 elementary and middle schools
throughout the country as part of the curriculum set by the Mexican Department of Education.
Our educational platform www.educacionsaludyvida.org was created so that our materials, contri-
butions from experts, legal and psychological advice, and statistics on the topics covered (violence,
sexuality, nutrition and addictions) can be read and used by more people. These materials can be
viewed online or downloaded free of charge from anywhere in the world. There are currently 20,128
active users of the platform, 16,579 teachers and 3,549 parents and students.
We have logged 58,053 downloads of our materials:
Elementary
1. Como, me nutro y me divierto (nutrition) 5,284 downloads
2. Aprendo a cuidarme de la violencia (non-violence) 8,657 downloads
3. ¿Qué son las adicciones? Cómo decido (addictions) 7,566 downloads
4. ¡Mi cuerpo se respeta! (sexuality) 8,789 downloads
Middle school
1. Distingo la violencia y me protejo (non-violence) 5,622 downloads
2. ¿Adicciones? ¡Alerta máxima! (addictions) 6,235 downloads
3. Para comer mejor (nutrition) 4,851 downloads
36
4. En mi cuerpo, ¡yo decido! (sexuality) 6,201 downloads
General
1. Como, disfruto y me nutro (nutrition) 4,848 downloads
We visited 134 public and private elementary and middle schools this year (81 elementary schools and 53
middle schools) to offer training and to deliver our educational materials as support tools in schools that are
not members of the Sindicato Nacional de Trabajadores de la Educación.
GR UPO MÉXICO FOUNDATION
We have trained 4,278 teachers on using the platform and the materials in their
classrooms.
1,381 legal and psychological consults have been provided on our two discussion
forums, where our users exchange experiences on issues of violence, sexuality,
addictions and nutrition.
Various experts collaborate with us on this project and have provided 22 articles
for our educational platform.
EDUCATIONAL WORKSHOPS:
At the Grupo México Foundation, we’re aware that all education must be compre-
hensive. In this regard, we’ve been working with Fundación Nemi for four years of-
fering various educational workshops to more than 69,000 middle and high school
students since the project started. This year, we began operations in Chihuahua
and San Luis Potosi, while continuing the work in the states of Sonora, Zacatecas
and Baja California Sur. During 2017, 261 workshops were held at 43 middle and
high schools to educate 19,846 students on the principal social issues they face
as teenagers. The topics we focus on are:
1. Violence
2. Sexuality
3. Nutrition
4. Addictions
5. Financial Education
6. Life Plan
7. Smart Communication
8. Self-Esteem
9. Entrepreneurship
37
SUSTAINABLE DEVELOPMENT REPORT 2017 GR UPO MÉXICO FOUNDATION
HUMANITARIAN AID
With the support of Ferromex, 554.5 tons of dry goods
2. Mazatlan Food Bank - distribution of high nutritional
value foods (50 children benefited in Sinaloa)
were transported free of charge to five Mexican states:
3. Fondo para la Paz - construction of a community kit-
Chihuahua, Chiapas, Mexico City, Oaxaca and Morelos.
chen (294 children benefited in Chiapas)
These actions supported 59,781 people.
4. AMEXTRA (Asociación Mexicana de Transformación
Rural y Urbana) - training in producing traditional re-
Thanks to this bus adapted as a “mobile school”, we’ve contributed to raising the level of education among adults
over 15 years of age with no access to formal education, bringing to their communities the opportunity to complete
their studies.
During 2017, students took 543 certification exams in basic education, in 40 Parral communities, where 73 students
completed their elementary education and 27 continue to take classes with the mobile school to receive their middle
311 tons of dry goods were delivered in the state of
gional crops, backyard orchards (100 children benefi-
school diploma.
Chihuahua, benefiting 24,412 people in four Tarahu-
ted in Chiapas)
mara communities: Creel, Temoris, Cuauhtemoc and
5. FAE (Fundación para la Asistencia Educativa) - meals
Bahuichivo.
for children of scavengers who live and work in Bor-
do de Xochiaca (300 children benefited in Estado de
THE ENVIRONMENT
REFORESTATION
As a result of the disasters following the September
Mexico)
Thanks to our partnerships with various local and state governments and institutions working to protect the environ-
earthquakes, and for the first time, more than 243 tons
6. Niños de Santa Fe - medical supervision for children
ment, we reforested 839 hectares with 839,247 trees in 19 Mexican states this year. This achievement was largely
of foodstuffs and personal hygiene items were transport-
with advanced child malnutrition, purchase of dietary
due to the collaboration and commitment of 2,702 volunteers, mostly Grupo México employees and their families who
ed to states other than Chihuahua, directly supporting
supplements (100 children in Michoacan)
participated in the tree planting days we held in different states where we operate. With these actions, we impacted
35,369 people.
7. ONL (Organismo de Nutrición Infantil) - monthly deli-
8,524,762 people.
veries of nutritional supplements (300 children bene-
WORLD FOOD DAY
fited in Jalisco)
The states reforested were:
There are 1.5 million children under 5 years of age suf-
8. Fundación Tarahumara José A. Llaguno - deliveries of
fering from chronic malnutrition in Mexico today, 13.6%
fortified milk and nutritional supplements to Raramuri
of the total population of this age group (UNICEF). Be-
communities (816 children benefited in Chihuahua)
cause of this, it has been fundamental for us to develop
9 Fundación Nacional de Mujeres por la Salud Comuni-
a partnership with HSBC and Fundación CMR, through
taria - providing baby formula for infants exposed to
a “World Food Day” project, which raises funds for dif-
perinatal transmission of HIV, from newborns up to 18
ferent NGO’s working to eliminate child malnutrition. In
months (90 children benefited in Chiapas)
38
2017, this program benefited 2,300 children through
nine organizations in six states.
PLAZA MOVIL PARRAL
This project, supported by the Instituto Chihuahuense de
1. Mundo Unitatis - purchase of nutritional supplements
Educación para los Adultos (ICHEA) and the Department
with high biological value proteins (250 children be-
of Education, began operations in 2016 and has support-
nefited in Chiapas)
ed 1,823 adults to complete their basic education.
PACIFIC
OCEAN
GULF OF
MEXICO
39
CENTRAL
AMERICA
SUSTAINABLE DEVELOPMENT REPORT 2017 n o.
STATE
T REES
PLA NTE D
HECTARE S
REF OREST ED
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
Veracruz
Puebla
Aguascalientes
Guanajuato
Mexico State
Mexico City
Tlaxcala
Zacatecas
Michoacan
Tamaulipas
Hidalgo
Jalisco
Oaxaca
Sonora
Queretaro
Chihuahua
Durango
Baja California Sur
San Luis Potosi
TOTAL
20,000
50,000
68,907
60,000
76,541
7,000
7,000
17,500
196,088
150,000
20,000
45,450
23,000
50,000
7,000
11,238
20,000
5,000
4,523
20
50
69
60
77
7
7
17
196
150
20
45
23
50
7
11
20
5
5
839,247
839
During our 7th Grupo México Foundation Tree Planting Day held in Huixquilucan,
Estado de Mexico, we planted 16,000 pine trees on 16 hectares of forest. Gru-
po México, Intermodal, Ferromex, Ferrosur, Cinemex, Sura, Fundación Posadas,
Hogan Lovells, KPMG, Laboratorios LAPI, Coparmex, Manpower and Nestlé em-
ployees and family members made up the 1,502 volunteers who participated, im-
40
pacting 443,000 residents near the “Las Cruces” site. Of note is that more and
more companies are joining our tree planting efforts, raising awareness among
their employees on the importance of the environment, strengthening family and
company ties through these actions.
A further 1,200 volunteers joined our reforestation efforts, planting 12,400 trees on
12 hectares of grasslands in the communities of Guerrero Negro, Esqueda, Nacozari,
Charcas and San Luis Potosí.
GR UPO MÉXICO FOUNDATION
Parallel to working with our volunteers, we are collaborat-
CONCIENCIA CINEMEX
ing with Ferromex on a project without precedent, ‘Vagón
Verde’ (Ecology Train), which holds mass tree planting
BENEFIT PREMIERES
days in various communities near the rail lines to improve
the physical appearance of public spaces, but more so to
raise awareness among children and youth on damage
This program offers a fundraising tool for participating or-
ganizations. Grupo México Foundation supports the work
of these organizations, matching the amount raised from
to the environment. The trees planted are produced at
ticket sales for their assigned premieres.
our nurseries, donated by Grupo México Foundation and
transported by Ferromex and Ferrosur on their rail lines.
During 2017, Grupo México Foundation matched
$1,932,248 pesos through 31 premieres given to 24 dif-
LO HECHO EN MEXICO
ferent organizations, impacting 541,806 people.
For the fifth year, we supported the “Mexico in 1 image,
1 Photo = 1 tree” contest, the goal of which is for par-
We appreciate the support of distributors like Videocine,
ticipants to express why they are proud to be Mexican,
Mantarraya, Diamond, Corazon, Amarok, Zima, Concien-
through a photograph. Participants are divided into three
cia Films and Casa de Arte, who support this program by
categories: professionals, amateurs and a special eye,
providing the movies. We continue to look for new part-
which is reserved for people with Down syndrome.
nerships to increase the number of offerings and hold
more premiere events. The confidence the distributors
In 2017, 19,889 photographs were submitted to the
have in the program is due to our excellent handling of
website and more than 1.7 million likes were recorded
their films, and also the transparency and consistency
for the participating photographs. The top 50 photos are
with which we report the results of the work by the orga-
shown in a touring exhibition that travels internationally
nizations benefited.
for a year.
SOCIAL MARKETING CAMPAIGNS /
The exhibition tour began at the Museo Soumaya in Mex-
FUNDRAISING
ico City, then moved to Tlaxcala, Estado de Mexico, Coli-
During 2017, we led three fundraising campaigns at
41
ma, Hidalgo, Nuevo Leon and Atlanta, and is currently in
the concession stands at various Cinemex movie the-
Toronto. The tour has been taken overseas thanks to the
aters across the country. The money raised is donat-
assistance of the Mexican consulates in the United States
ed to selected organizations to support their projects
and Canada.
and social causes.
SUSTAINABLE DEVELOPMENT REPORT 2017 2017 Campaigns:
1. Fundación CMR
MARQUEE CAMPAIGN
This program, which has been in operation for 2 years,
1,000 children benefited Cause: Nutrition
offers spaces on the marquees at our movie theaters for
2. La Alegría de los Niños I.A.P.
organizations to display their social message, to increase
70 children benefited Cause: Education
their visibility and to raise awareness for their work. Elev-
3. Animal Defense Heroes
en campaigns were held in 220 complexes nationwide
1,550 people benefited Cause: Animal abuse
in 2017. We displayed 2,420 posters during the year,
reaching approximately 30 million people.
“CINEMINUTO” SOCIAL MESSAGES
It is a priority of Grupo México Foundation to showcase
The organizations benefited were:
the work of those who care for the less privileged. In this
1. ORT de México
regard, we donated airtime at Cinemex theaters across
Education in social responsibility
the country to educate the public on being generous and
2. Animal Defense Heroes
to raise awareness on the work of the different organiza-
Animal abuse
tions we support with this program. In 2017, we showed
3. Expo Fundación y Congreso
3,445 Cineminutos in 265 complexes, reaching more
Professionalization of charity organizations
than 32 million moviegoers.
4. La Alegría de los Niños
CINEMEX RUN
Education for abandoned children
5. Apoyo, Salud y Asistencia GIN
For the 8th year, this charity run took the Magic of the
Developing Mexican talent
Movies to the streets of Mexico City. More than 6,000
6. Congregación Marina Trinitaria
runners participated with the goal of supporting an orga-
Support for underprivileged children
nization that we carefully selected to receive a donation
7. Fundación Lorena Ochoa
collected from the registration fees.
Education for underprivileged children
42
In 2017, La Alegría de los Niños I.A.P. was chosen
Fostering tolerance and respect
8. Museo Memoria y Tolerancia A.C.
as the recipient from the run, to continue their proj-
9. Juguetón
ect Corriendo por la Educación (Run for Education),
Campaign to collect toys for underprivileged children
where children victims of abandonment and abuse
will receive quality education within a model of com-
FUNDRAISING CAMPAIGNS 1x1 AND 1x3 FO-
prehensive care that ranges from physical and psy-
LLOWING THE SEPTEMBER EARTHQUAKES
chological rehabilitation, academic regularization,
In response to the September earthquakes, Cinemex and
affection and attentive care within the shelter, until
Grupo México Foundation launched a fundraising cam-
the children are placed with a family.
paign with the funds raised going to support the most
GR UPO MÉXICO FOUNDATION
affected areas of the country. In the first stage, Grupo México Foundation matched
peso for peso the money donated by the public, however because of the level of the
disaster, a second stage was launched, where Grupo México Foundation tripled each
peso donated, raising more than 37 million pesos.
Committed to everyone who made a donation placing their trust with us, Grupo Méx-
ico Foundation took on the task of seeking out a major project that would impact the
most people possible, and so the decision was made to build a specialization hospital
in the municipality of Juchitan de Zaragoza, Oaxaca. Given the magnitude of this
project, Grupo México Foundation stepped in to make up the shortfall and contrib-
uted in excess of $140 million pesos to ensure the project becomes a reality. The
total investment for this project will be $178 million pesos, which will benefit 255,315
residents of the Oaxaca Isthmus.
DONATIONS RECEIVED
FROM THE GENERAL
PUBLIC
$1,306,585
$8,778,982
$10,085,567
GRUPO MÉXICO FOUN-
DATION CONTRIBUTION
$1,306,585
$26,336,947
$27,643,532
$37,729,099
$140,270,901
$178,000,000
First stage: Double
Second stage: Triple
Subtotals
Total Fundraising Campaign
Grupo México Foundation
Additional Investment
TOTAL INVESTMENT
SUPPORT FOR INSTITUTIONS
EFICINE 189 Support
Committed to what Mexico does well, Grupo México Foundation received, reviewed
43
and selected cinematographic projects with great potential and supported the success-
ful projects through the EFICINE tax incentive program to complete their production.
In 2017, we supported 8 projects approved by the CIEFICINE:
1. Invisible
2. El Rey de la Fiesta
3. La Nave
4. Los Idealistas
SUSTAINABLE DEVELOPMENT REPORT 2017 2016-2017 COMPARATIVE
Dr. Vagón, the Health Train
2016-2017 COMPARATIVE
Environment
States
Increase
Patients
Increase
2016
2017
2016 - 2017
2016
2017
2016 - 2017
Dr. Vagón,
the Health
Train
13
15
15%
45,573
61,212
Doctor’s visits
Increase
Workshops held
2016
2017
2016 - 2017
184,928
266,440
44%
2016
803
2017
1,028
34%
Increase
2016 - 2017
28%
Workshop participants
Increase
Medications
Increase
2016
2017
2016 - 2017
2016
2017
2016 - 2017
Dr. Vagón,
the Health
Train
22,925
45,806
Kilometers
100%
Increase
2016
2017
2016 - 2017
12,796
15,443
21%
64,741
79,013
22%
2016-2017 COMPARATIVE
Education
44
Project
Humanitarian
Aid
Project
Educational
Workshops
Project
World
Food Day
Project
Health and Living
Educational
Materials
States
People Impacted
2016
2017
2016
2017
Increase
2016 - 2017
3
5
15,230 people
59,781 people
292%
States
People Impacted
2016
2017
2016
2017
4
5
11,629 middle
and high school
students
19,846 middle
and high school
students
States
People Impacted
2016
2017
2016
2017
Increase
2016 - 2017
71%
Increase
2016 - 2017
4
6
728 children
2,300 children
215%
States
Visits
Increase
Consults
Increase
2016
2017
2016
2017
2016 - 2017
2016
2017
2016 - 2017
32
32
4,938
20,128
308%
496
1,381
178%
GR UPO MÉXICO FOUNDATION
Increase
2016 - 2017
Project
Tree Planting
Project
States
People Impacted
2016
2017
2016
9
2017
18
3,619,725
8,524,762
136%
Trees donated
Increase
Volunteers
2016
2017
2016 - 2017
2016
608
2017
2,702
Increase
2016 - 2017
344%
Tree Planting
412,159
839,247
104%
2016-2017 COMPARATIVE
Conciencia Cinemex and Support for Institutions
Events
States
Project
Benefit
Premieres
Project
Cineminutos
Sociales
Project
Expo Fundación
y Congreso
Project
Directly Impacted
Increase
2016
2017
2016
2017
2016
2017
2016 - 2017
29
31
6
10
53,498
24 Institutions
541,806
24 Institutions
913%
Copies Shown
States
Directly Impacted
Increase
2016
2017
2016
2017
2016
2017
2016 - 2017
2,786
3,445
32
32
4,107,583
13 Institutions
23,723,351
13 Institutions
478%
Events
States
Directly Impacted
Increase
2015
2017
2016
2017
2016
2017
2015 - 2017
1
1
1
1
200
174 Institutions
354
152 Institutions
77%
Workshops
States
Directly Impacted
Increase
2016
2017
2016
2017
2016
2017
2015 - 2016
CAI Monterrey
6
2
1
1
476
1 Institutions
674
1 Institutions
42%
45
2016-2017 COMPARATIVE
Red de Asociaciones y Fundaciones Empresariales
States
Orgs. Benefited
Increase
Indirect Beneficiaries
Increase
2016
2017
2016
2017
2016 - 2017
2016
2017
2016 - 2017
32
32
985
1,530
55%
49,250
76,500
55%
Project
Red de
Asociaciones
y Fundaciones
Empresariales
SUSTAINABLE DEVELOPMENT REPORT 2017 CAI MONTERREY
RED DE ASOCIACIONES Y FUNDACIONES
Since 2012, the stylist workshop offered at the Monterrey
EMPRESARIALES
CAI has held courses on: hair stylist, nail care and art,
After two years, the ‘Red de Asociaciones y Fundaciones
barbering, coloring, and professional make-up, improving
Empresariales’ (Network of Organizations and Corporate
the quality of life of people with limited job opportunities.
Foundations) has 3,000 organizations and 91 companies
To date, 2,114 people have participated in this program to
and corporate foundations registered.
receive training for trades in demand and with the option
of self-employment or entrepreneurship.
In 2017, the network expanded its presence across Mexi-
co and into various countries in Latin America (Colombia,
Expo Fundación y Congreso
Venezuela, Chile, Argentina and Peru).
We successfully held the fourth Expo Fundación y Con-
greso creating a space to train charity organizations and
The network received recognition from INDESOL, partic-
to strengthen social efforts in Mexico. The event was
ipating in the annual regional meetings on strengthening
planned and organized to offer participants conferences
charity organizations.
and seminars rich in social content.
We also received recognition at the International Con-
The inaugural event was led by Lorena Ochoa, Mexican
gress “Education and Culture of Peace” organized by
professional golfer, who shared her story of success in
SERCAP International (company that provides training
raising awareness on the discipline and values needed to
services for the public and private sectors), Peru office,
achieve any purpose in life. Our speakers filled the forum
as the best innovative and socially responsible project in
with innovative know-how and gave attendees practical
the category corporate social responsibility.
tools to better manage their organizations. Marco Antonio
Regil, Yordi Rosado and Odin Dupeyron addressed differ-
32 in-person workshops and 12 webinars were held,
ent topics to offer conference-goers essential techniques
which translates into 192 hours of in-person training and
and know-how to improve their work.
48 hours of online training, free of charge.
46
Representatives from 152 NGO’s attended the event,
learning and sharing about social issues and form-
ing alliances.
GR UPO MÉXICO FOUNDATION
SOCIAL LINK AGE
VOLUNTEER DAY
GRUPO MÉXICO FOUNDATION
As we do each year, on the second Saturday in October,
Grupo México Foundation held its annual Volunteer Day,
bringing together employees from the companies of Gru-
po México and Cinemex to volunteer with their families,
channeling their selfless work, joining forces and multi-
plying efforts to benefit those most in need in the com-
munities where we operate. Building on the success and
VACATIONS WITH PURPOSE
In May 2017, we launched the ‘Vacaciones con Sentido’
(Vacations with Purpose) program in Peru, the goal of
which is to offer Grupo México collaborators the opportu-
nity participate in experiences of international cooperation
contributing to the social development of communities in
different countries, fostering respect for diversity and sol-
idarity, through mutual support and commitment.
Our employees in Mexico, Peru and the United States
impact of this program, we again extended these social
gave 440 hours of volunteer service.
efforts this year to communities in Peru and the United
States, through the participation of collaborators from the
Grupo México companies in these countries, Southern
Copper Corporation and ASARCO, respectively.
This year, 7,200 employees who, with their families, to-
taled more than 29,000 volunteers in Mexico, Peru and
the United States to benefit schools, public spaces, social
institutions, and immigrant centers.
During the Grupo México Foundation Volunteer Day, our
efforts reached more than 95,000 people and 45 insti-
tutions in 32 communities in 14 Mexican states, two US
states and two provinces in Peru.
This program benefited 621 people and 7 institutions in
five communities in Peru:
1. San Sebastián
2. Wanchaq
3. Yucay
4. Cusco
5. Huasao
47
SUSTAINABLE DEVELOPMENT REPORT 2017 MINING
DIVISION
MINING DIVISION / GROW
GR OW
STRUCTURE OF THE DIVISION
AND PRINCIPAL SUBSIDIARIES
G4-7
The Mining Division of Grupo México is represented by our subsidiary Americas Min-
ing Corporation (AMC), comprised of:
Southern Copper Corporation
Minera México, S.A. de C.V.
Southern Peru Copper Corporation
Asarco LLC
Minera los Frailes, S.L.
SIGNIFICANT CHANGES
IN THE ORGANIZATION
G4-13
Nueva Rosita plant closure. In September 2017, we announced the conclusion of
our operations in Nueva Rosita, Coahuila, consisting of a coal preparation plant with
an annual production capacity of 900,000 tons of clean, high quality coal, and a coke
plant with 21 furnaces with an annual production capacity of 100,000 tons of coke.
49
PRINCIPAL PRODUCTS AND MARKETS
G4-4, G4-8, G4-9
Products. The principal activities of our Mining Division are the exploration, exploita-
tion (mining and extraction of raw materials), and production of minerals, metals and
other byproducts.
SUSTAINABLE DEVELOPMENT REPORT 2017MINING DIVISION PRODUCTS & CLIENTS
Mining Division, 2017
Our products
Copper Copper is the third most used
metal in the world and is a basic compo-
nent for infrastructure and growth. It has
exceptional chemical and physical proper-
ties, including high electrical conductivity
and high resistance to corrosion. It also
has excellent malleability and ductility.
Copper
Molybdenum
Zinc
Silver
Gold
Molybdenum is used primarily to manufac-
ture stainless and special steels. It is used
to strengthen steel alloys and to soften
tungsten alloys. It is also used as a catalyst
in the oil and gas industry, and in fertilizers,
dyes, paints, reagents and lubricants.
Zinc is used primarily to galvanize iron and
steel to protect against corrosion, in man-
ufacturing batteries and for architectonic
purposes. It is also the base for zinc oxide,
which is used in tires, paints and livestock
feed, among other products.
Silver is used in photography, electrical
products and electronics, and to a lesser
degree, in traditional welding and weld-
ing alloys, jewelry, coins, silverwork and
catalysts.
Gold is used in jewelry, in cancer treatments
and for other diseases. It is also used in
industrial welding, coloring in photography,
and also in the aerospace sector, among
other uses.
Our customers
Our customers work in construction,
the manufacturing of electrical products
and electronics, telecommunications,
computers, mobile phones, industrial
machinery and equipment, consumer
products, and are also in the automo-
tive and transportation sectors. Our
customers also include metals sellers,
smelters, and metal recovery and recy-
cling companies.
Our principal customers work in the
transformation industry, treating and
processing molybdenum, and its deriv-
atives, including molybdenum oxide.
Our customers are in the steel, electri-
cal and cable industries, sellers of zinc
alloy products, and pure metal supply
companies.
Our principal customers are in the haz-
ardous waste treatment and recovery
industry, manufacturers of specialty
pieces that use metal alloys, and sellers
of construction materials.
Our customers are active in many sec-
tors, benefiting from the properties of
this metal, such as its corrosion resis-
tance, among others.
50
MINING DIVISION / GROW
The Mining Division reported US$7.555 billion in sales in 2017, a 22% increase over
2016, due to higher metals prices: copper +28%, zinc +38%, and molybdenum
+28%. EBITDA was US$3.457 billion, equal to 46% of sales, which represents a
year-over-year growth of 51%, attributed to low-cost production and operating effi-
ciencies, and also improved copper prices.
Contribution by metal to AMC’s 2017 cumulative sales:
CONTRIBUTION BY METAL TO AMC’S CUMULATIVE SALES
7
8
6
4
5
3
2
1
1 Copper
2 Silver
3 Molybdenum
4 Sulfuric Acid
5 Zinc
6 Gold
7 Others
8 Lead
2017
84.2%
3.8%
4.7%
1.1%
4.3%
0.9%
0.3%
0.7%
51
INVESTMENTS
AND PROJECTS
G4-EC7, G4-EC8
The Mining Division of Grupo México has set as a goal
to become one of the top copper producers in the world.
We currently have the largest reserves in our sector and
in the next 6 years, we anticipate increasing production
to over 1.6 million tons of copper.
As part of this growth, in 2017 we invested US$1.174 bil-
lion, of which US$336 million was allocated to our proj-
ects in Mexico, US$639 million to projects in Peru, and
US$199 million in the United States.
Principal Projects in Peru
Expansion Project in Toquepala, Tacna. Represent-
ing an investment of over US$1.700 billion, we are mod-
ernizing our operation and building a new plant, which will
increase our production capacity by 69%, to 250,000
tons of copper per year at this mine. This investment will
modernize our mine equipment to build a fleet of more
than 90 trucks, a new warehouse and shop for mine
52
sustainable operation and a more compact plant, easier
to supervise and maintain.
As part of the modernization project, we’ve replaced pro-
cess equipment that will allow us to recover 10% more
water from the industrial process, meaning 240 liters per
second. These savings equal the daily water consump-
tion of more than 172,800 people. Additionally, we’re in-
vesting in infrastructure to recover water from our tailings
dam to reintroduce this water into the process, resulting
in a lower consumption of fresh water.
More than 8,000 direct jobs have been created during
the project’s construction phase in an area away from
urban centers and where opportunities are scarce. Also,
the supply chain for our operations in Peru has been
strengthened, comprised of more than 1,900 suppliers,
making a significant contribution to the region’s economy.
At December 31, 2017, the project reported 87% com-
pletion and the concentrator is expected to start opera-
tions mid-2018.
MINING DIVISION / GROW
and a new crusher at the pit optimizing the haulage dis-
Principal Projects in Mexico
tances of the cargo trucks, resulting in operational sav-
Buenavista Zinc, Sonora. This project is locat-
ings of US$23 million per year. The project represented
ed at the Buenavista deposit in Sonora and consists
an investment of US$226 million and is fully completed
of the construction of a concentrator with a produc-
and in operation.
tion capacity of 80,000 tons of zinc and an additional
20,000 tons of copper per year. The basic engineering
Tailings Thickeners at the Toquepala and Cuajone
has been completed and we have started to purchase
Concentrators. The thickeners allow us to capture
the principal equipment. On completion, the proj-
more water from the metallurgical process by removing
ect will double the zinc production of the Mining Divi-
solids from our mine waste and recover more water from
sion. This investment has a budget of US$413 million
the industrial process. We’ve installed seven additional
and the project is expected to be completed in 2020.
high-efficiency thickeners at our operations in Peru, with
which we can recover 104,000 m3/day at Toquepala and
Pilares, Sonora. This project is located in Sonora, 6
140,000 m3/day at Cuajone. This equipment will increase
km from the La Caridad mine consists of an open pit
water recovery by 10%, meaning 240 liters per sec-
mine with an annual production capacity of 35,000
ond, equal to the daily consumption of 172,800 people.
tons of copper concentrate. The high-grade ore will
be transported by the mine trucks to feed the prima-
The investment in the installation of the thickeners at our
ry crushers at the La Caridad copper concentrator,
Toquepala and Cuajone mines totaled US$85 million.
enriching the average grade. We are currently design-
ing the mine plan and the new road has been chart-
Tia Maria. The engineering process for this project was
ed. The budget for this investment is US$159 million
completed in 2017, fulfilling the environmental require-
and the project is expected to be completed in 2019.
ments, and we finalized the environmental impact as-
53
equipment, a new primary pit crushing plant, a concen-
Ore transportation and crushing project in Cuajone,
sessment. We will continue to work with the Peruvian
Principal Projects in the United States
trator with a capacity to process 60,000 tons of ore per
Moquegua. The project consisted of replacing the rail trans-
government and expect to receive the construction permit
Modernization of the Hayden Smelter. This modern-
day, and various investments in auxiliary infrastructure.
portation system with a conveyor belt and crushing system,
during the first six months of 2018. This project will increase
ization project includes replacing converter furnaces at
Using cutting-edge
technology, we have
installed
high-capacity and more efficient equipment in terms of
water and energy consumption. Efficiency in the use of
resources and in our processes translates into a more
our annual metallic copper production by 120,000 tons.
the Hayden smelter, and optimizing the vapor and dust
collection and management systems. With this, we will
SUSTAINABLE DEVELOPMENT REPORT 2017 increase our SO2 capture rate from 95% to 99% and also improve our production efficiency to produce an additional
15,000 tons of copper per year. The project has an investment budget of US$229 million, reports 73% progress, and
CUSTOMER RELATIONS
G4-PR5
will be completed in April 2018.
Principal Projects in Spain
Quality Policy. The Mining Division’s quality policy states that quality will be mea-
sured through customer satisfaction, based on understanding customer needs, and
is reflected in the ongoing improvement of our production processes.
Aznalcollar, Andalucía. This project is located 35 km from the city of Seville in Spain. After the project was awarded
to Grupo México through an international public tender in 2015, in mid-2016 the regional authorities granted us permis-
Customer Satisfaction. For all Mining Division subsidiaries, the satisfaction of our
sion to start exploratory activities. From July 2016 to April 2017, we conducted an intense exploratory campaign. The
customers is essential to maintaining our operations and being recognized for the
results so far confirm the initial information for the project and would suggest a promising potential to eventually increase
excellent quality of our products. Because of this, we conduct a customer satisfaction
the initial size of the ore bodies. We’re working on a revised feasibility study, which will be completed by the end of the
survey each year to identify opportunities for improvement. Products and/or services
year. The permit process will continue and the detailed engineering is expected to begin at the end of 2018, with the
that receive a low rating are assessed and corrective measures are determined and
monitored. The effectiveness of the corrective actions is supervised internally as a
result of the interaction with the customer.
In 2017, we received a rating of 93%, a score that shows us that most of our prod-
ucts and services meet or exceed the expectations of our customers.
mine starting operations in 2021.
The estimated investment for the project is budgeted at US$290 million and will increase zinc production by 102,000
tons of zinc equivalent per year.
EXPLORATIONS
In our search for economic growth, we’ve conducted extensive exploratory projects to identify new mineral resources at
our current sites and at new deposits in Peru, Mexico, Chile, Argentina, the United States and Ecuador.
PRINCIPAL EXPLORATION PROJECTS
54
Country
Project
Country
Project
Mexico
• El Arco
• El Pilar
• Bella Union (La Caridad)
• Chalchihuites
• Alfareña Project
(Santa Barbara)
Peru
Chile
Ecuador
Argentina
• Los Chancas
• El Salado
• Chaucha – Ruta del Cobre
• Caldera Project
United States
• Chilito (Arizona)
MINING DIVISION / GROW
55
SUSTAINABLE DEVELOPMENT REPORT 2017 MINING DIVISION / PROMOTE
Contractors. At Grupo México, our activities contribute indirectly to job creation. In
2017, 10,303 contractors delivered services at our Mining Division sites.
Freedom of association
G4-11, G4-LA4, G4-LA8
The companies that comprise the Mining Division of Grupo México guarantee free-
dom of association as a labor right. At 2017 close, 11,889 of our collaborators were
unionized, representing 76% of the division’s workforce.
We strive to strengthen trust between the company and our collaborators, including
their union representatives, for which we maintain ongoing dialog through the hu-
man resources department. We communicate operational changes with the advance
notice required under the collective bargaining agreements and we act according
to legal requirements, as applicable. For example, in the United States, the Worker
Adjustment and Retraining Notification Act (WARN) requires 60 days notice for mass
layoffs and/or closures.
There were illegal 3 work stoppages at our operations in Peru this year, although the
company signed agreements with the unions involved. There was no impact on the
company’s operations or activities.
57
PRO MOTE
WORKFORCE AND LABOR PRACTICES
Workforce
G4-9, G4-10
Our People. The Mining Division team was comprised of 15,672 collaborators in
2017, with 98% under permanent contract and 100% working full time. This means
we can design career development plans, and also create a solid culture that perme-
ates all our operations.
COLLABORATORS
Mining Division, 2015-2017
Year
2015
2016
2017
COLLABORATORS BY REGION
Mining Division, 2017
Subsidiary
Mexico
Peru
USA
56
Collaborators
8,453
4,869
2,350
COLLABORATORS BY AGE GROUP
Mining Division, 2017
Age group
18-24
25-34
35-44
45+
Collaborators
839
4,599
3,925
6,309
Collaborators
16,062
15,883
15,672
%
54%
31%
15%
%
5.37
29.34
25.04
40.25
SUSTAINABLE DEVELOPMENT REPORT 2017 MINING DIVISION / PROMOTE
Equal opportunity and non-discrimination
G4-LA12, G4-HR3
Base salary and wage equality
G4-EC5, G4-LA13
Although the mining operation’s workforce remains primarily made up of men, we encourage the par-
During 2017, the average Base Salary in the Mining Division was equal to 8.07 times the local mini-
ticipation of women under our approach of inclusivity and equal opportunity. We would like to involve
mum wage.2 The Base Salary includes the basic wage, productivity bonuses, cash benefits and profit
more women in the recruitment processes and we strive to always offer equal conditions. In 2017, 942
sharing, where applicable.
of our collaborators were women, representing 6% of the workforce.
WOMEN BY EMPLOYEE CATEGORY
Mining Division, 2017
Category
Senior management and
Department heads
Technicians
Specialists
Assistants
Number of
collaborators
Number of collaborators
that are women
%
Women
166
5,400
552
9,554
21
444
98
431
12.65
8.22
17.75
4.51
Non-discrimination. We adhere to the company’s principles and values and in keeping with our com-
mitment of respect for human rights, the Mining Division of Grupo México has zero tolerance for acts
of discrimination. Our Code of Ethics expressly prohibits discrimination on the basis of ethnic origin or
nationality, gender, age, disability, social condition, political affiliation, health condition, religious beliefs,
immigration status, opinions, sexual preference, or marital status.
Any collaborator that is witness to or the victim of any form of discrimination is encouraged to report
58
the incident via the Grupo México reporting line. This formal mechanism is operated by a third party
and offers a phone number, email and website to report incidents.1
We continue to work to ensure wage equality in all professional categories for women.
Attracting and retaining personnel
G4-LA1
During 2017, 2,114 collaborators joined our mine operations workforce in Mexico, Peru and the United
States, and there were 1,506 separations. The turnover rate this year was 9.6%.
NEW HIRES
Mining Division, 2015-2017
Subsidiary
Mexico
Peru
USA
18-24
556
31
53
Age groups
Gender
25-34
800
166
68
35-44
183
76
44
45+
73
20
44
Male
1,465
278
191
Female
147
15
18
59
1 For more information on our Code of Ethics and reporting procedures, see the section on Human Rights in the Corporate Gover-
2 Considering the Base Salary (BS) and the Minimum Wage (MW), the BS/MW average is calculated weighting the BS and MW for each country where we
nance chapter.
operate, based on the number of collaborators in the Mining Division in each territory.
SUSTAINABLE DEVELOPMENT REPORT 2017 SEPARATIONS BY REGION
Mining Division, 2017
Subsidiary
Mexico
Peru
USA
TURNOVER RATE
Mining Division, 2017
Subsidiary
Mexico
Peru
USA
TURNOVER RATE
Mining Division, 2015-2017
Subsidiary
2015
2016
2017
Collaborators
1,068
202
236
Collaborators
12.6%
4.1%
10.0%
Collaborators
6.72%
10.31%
9.61%
TURNOVER RATE BY GENDER
Mining Division, 2017
Gender
Male
Female
No. of Separations
1,418
88
Turnover rate
9.61%
9.54%
60
MINING DIVISION / PROMOTE
Employee Benefits
G4-LA2
To contribute to the employment stability of our Mining Division employees, we offer
the following benefits above those required by law:
Salary-related
Life insurance
Major medical insurance
Family protection insurance
Savings fund
Grocery vouchers
Productivity bonus
Pension fund
Others
Housing assignment
Utilities (power, water, etc.)
Medical clinics
School (elementary and middle school) for children of employees
Employee cafeterias
Sports facilities
Scholarships for employees and their children
Share purchase plan for employees
Retirement plan
61
SUSTAINABLE DEVELOPMENT REPORT 2017 MINING DIVISION / PROMOTE
TRAINING AND CAREER DEVELOPMENT
Training
G4-LA9, G4-LA10
TRAINING PROGRAMS
Mining Division, 2017
Peru
The competencies required are defined based on the position, considering the types of tasks per-
In 2017, we delivered a total of 413,158 training hours in the Mining Division, with an average 26.38
formed, the technology available, and possible special projects. These competencies then provide
training hours per collaborator.
TOTAL TRAINING HOURS
Mining Division, 2015-2017
Year
2015
2016
2017
No. of Hours
595,426
548,118
413,158
essential input for the annual training plan. The principal programs are: (i) occupational health and
safety, (ii) technical competencies, and (iii) behavioral skills (coaching, supervisor responsibilities and
management skills).
United States
Programs are based on developing leadership skills, such as conflict resolution, mechanisms for
employee feedback and adaptive leadership, among others. Management courses are offered on
diversity, understanding policies and procedures, gender equality and discrimination. Additionally,
courses are held at a creative leadership center, outside the ASARCO facilities, where we strive to
The skills management and training programs we offer our collaborators in the Mining Division vary
maximize the management skills of our collaborators.
according to their activity and the country where they work.
TRAINING PROGRAMS
Mining Division, 2017
Mexico
Mining requires highly specialized technical skills. As a result, it is a priority to develop talent in the
communities where we operate, through education programs in collaboration with different organi-
zations. In Mexico, we continue to collaborate with the INEA, Conalep, Instituto Sonorense de Edu-
cación and the Universidad Autónoma de San Luis Potosi, developing industry-related educational
programs. Thanks to this, various collaborators and people from the communities where we work
Programs are based on the Minera México Corporate, Administrative and Technical Competencies
have received training.
Model, which has a specific profile of required competencies for each position. These competencies
are assessed to identify training needs and define the annual training programs. Detecting opportu-
Similarly, our mine operations in Peru support the professional development of the members of our
62
nities for training results from dialog between supervisor and collaborator, planning their professional
neighbor communities.
63
development and training together
SUSTAINABLE DEVELOPMENT REPORT 2017 MINING DIVISION / PROMOTE
Performance review
G4-LA11
OCCUPATIONAL HEALTH AND SAFETY
In addition to training, and also relevant for professional development, we conduct a performance re-
view for non-union employees, in which all employees who were with us throughout 2017 participated.
Workplace health and safety
G4-LA5, G4-LA6, G4-LA7
PERFORMANCE REVIEW PROCESSES
Mining Division, 2017
Mexico
Goals for our employees are defined based on the strategic goals of the business. Employee
competencies and goals achieved are assessed annually. In the process, dialog is strength-
ened between the employee and their supervisor, and also alignment between projects and
teamwork.
Peru
A Performance Review Tool is applied to employees that have been with the company for more
than 6 months, and includes general criteria, such as: applying skills and knowledge, work plan-
ning and organization, interpersonal relationships, results, initiative, work attitude and creativity.
Additionally, management with employees under their charge are assessed in: management skills,
cost control and resource management, safety, problem analysis and decision making, and de-
veloping their team.
United States
Each employee and their supervisor set goals, which forms the basis for the annual review at the
end of the year, using an online tool. Career planning sessions are held, where the employee and
64
the supervisor set new goals and discuss skills and areas for improvement for the next perfor-
mance review.
Focus. For Grupo México, caring for the lives, health and wellbeing of our collaborators and their families is the top
priority at all our operations. No other task is more important.
Our primary commitment is to creating optimal and safe work environments for our collaborators, which we do to the
highest standards in occupational health and safety. Our goal: ZERO accidents.
The Mining Division’s Comprehensive Workplace Health and Safety Management System helps us to implement effec-
tive processes and provide our collaborators with the knowledge and skills they need to manage risks, prioritize goals,
and to prevent accidents.
Investment in Occupational Health and Safety. We invested US$127 million in occupational health and
safety in 2017.
INVESTMENT AND SPENDING IN
WORKPLACE SAFETY
US$ millions
Mining Division, 2017
Category
Administrative costs
Training
Personal protective gear
Industrial hygiene studies
Engineering works
Total
Amount
6.90
1.02
12.14
2.45
97.85
120.36
INVESTMENT AND SPENDING
IN HEALTH
US$ millions
Mining Division, 2017
Category
Health awareness promotion
and protection
Detection and prevention
Treatment
Rehabilitation
Total
65
Amount
0.94
2.58
2.60
0.04
6.16
SUSTAINABLE DEVELOPMENT REPORT 2017 INCIDENT RATE (IR),
Mining Division, 2013-2017
SEVERITY RATE (SR),
Mining Division, 2013-2017
OCCUPATIONAL DISEASE
RATE (ODR),
Mining Division, 2013-2017
3
1
0
2
4
9
.
0
4
1
0
2
4
8
.
0
5
1
0
2
9
6
.
0
6
1
0
2
5
7
.
0
7
1
0
2
8
7
.
0
IR =
No. of incapacitating accidents
Total man hours worked
3
1
0
2
9
1
.
0
4
1
0
2
9
4
.
0
5
1
0
2
3
2
.
0
6
1
0
2
0
3
.
0
7
1
0
2
2
3
.
0
x 200,000
SR =
No. of days lost
Total man hours worked
x 1.00
3
1
0
2
7
4
.
0
4
1
0
2
2
3
.
0
5
1
0
2
2
1
.
0
6
1
0
2
7
3
.
0
7
1
0
2
0
3
.
0
No. of cases of occupational diseases
ODR =
x 200,000
Total man hours worked
Occupational Safety. Over the last 5 years, the Mining
and prevention and educational programs, and also the
Occupational Health and Safety Committees. Our guidelines to safeguard the safety of our employees include
Division has reduced its incident rate by 28%, and its
treatment of diseases.
the creation and operation of our health and safety committees, where 7% of the total collaborators represent the
severity rate by 48%. Our occupational accident rate is
entire workforce.
42% below the average for the mining industry in the
Despite all the efforts made in occupational safety, in
United States, according to the Mine Health and Safety
2017 we deeply regretted the loss of three collaborators
Administration.
66
as a result of accidents at our Mission (United States),
Ilo Smelter (Peru) and Santa Eulalia (Mexico) operations.
In the United States, our mines again reported record low
These losses impacted us deeply and motivate us to dou-
HEALTH AND SAFETY COMMISSIONS
Mining Division, 2017
Country
Description
% of the
workforce
represented
67
accident and severity rates, with an incident rate 59%
ble our efforts. We will stop optimizing preventive mea-
Our operations in Mexico have a Central Safety Committee comprised of managers,
below the regional average. At our operations in Mexico,
sures to eliminate unsafe conditions and behaviors until
directors and superintendents, which is responsible for ensuring compliance is met
thanks to teamwork, the accident rate is 53% below the
we have reached our goal of “zero accidents”.
Mexico
with regulations and the corrective measures defined from monitoring operations.
100
industry average.
Over the last 5 years, we’ve reduced our occupational
disease rate by 34%, as a result of different risk control
Also, the Departmental Safety Committee reviews the work conditions within the
Mining Division and is comprised of supervisors, and there is a Health and Safety
Commission made up of management and collaborators.
SUSTAINABLE DEVELOPMENT REPORT 2017
MINING DIVISION / PROMOTE
HEALTH AND SAFETY COMMISSIONS
Mining Division, 2017
- Mine Rescue Brigades. All our mine operations
- Cuajone, Ilo and Toquepala hospitals. In Peru,
have emergency brigades, formed by volunteer
our collaborators and their families have 3 company
In Peru, we have a Joint Workplace Health and Safety Committee at all our opera-
mine workers who assist their colleagues in the
hospitals available to them, in Cuajone, Ilo and Toque-
Peru
tions, comprised of management and collaborators from all the different areas. This
100
event of any emergency requiring immediate action.
pala. Collaborators who perform higher risk activities
committee reviews the operating conditions to ensure these are optimal, analyzes
It is essential that these brigades receive proper
receive regular medical examinations to assess their
risks, and follows up on health and safety plans and programs.
training to know how to act. In the Mining Division,
health and take any measures needed.
Our mines in the United States also have a health committee at each operation,
we train these brigades in the necessary skills in
United
States
made up of management and collaborators, representing the entire workforce.
the event of a disaster.
- Certifications. During 2017, we maintained various
In addition to participating in the design of the health and safety programs, the
100
certifications in occupational health and safety and we
committees regularly inspect the working conditions, participate in accident investi-
- “Bienestar” program. In Mexico, we have imple-
also maintained units certified as healthy workplaces.
gations, and hear concerns from employees on health and safety issues.
mented the program “Bienestar” (Wellbeing), focus-
We have also continued to work with the Mexican De-
Health and Safety Programs
ing on preventing chronic degenerative diseases, such
partment of Labor and Social Welfare, participating in
as diabetes, high blood pressure, dyslipidemias or
the voluntary Workplace Health and Safety Self-Man-
obesity, through the detection of potential risk factors
agement Program.
- Total Safety Culture (TSC). In 2017, we started
- Behavior-Based Safety (BBS). In Peru, the beha-
and recommending courses of action, with the sup-
to implement this training program on occupational
vior-based safety model is being consolidated. The
port of nutritionists. Additionally, we continue working
This has been possible thanks to our internal man-
safety for the different supervisor levels, who in turn
goal of this program is to reinforce safe behaviors
on the “Entornos Saludables” (Healthy Environments)
agement system, known as the Sistema Integral de
then share the training with the employees under their
through observation and feedback during the day-
program, maintaining recognition for 3 schools and 5
Administración de Seguridad y Salud en el Trabajo
charge.
to-day work, creating a positive environment that en-
company neighborhoods as healthy and safe environ-
(SIASST) (Comprehensive Workplace Health and
courages participation and pride in efforts aimed at
ments by the Department of Health.
Safety Management System), which covers monitor-
The sessions are delivered by the operations officers,
creating a safe work environment.
ing risks and developing improvement plans as results
mine managers and engineers, among others. Each
- Healthy lifestyle. In addition to the actions men-
are obtained, and also the responsibilities of our col-
68
8-hour session addresses key safety principles.
In 2017, we started to implement the program at the
tioned above, we offer workshops on prevention and
laborators and contract employees.
69
This training was offered to personnel at Mission in
zinc electrolyte refinery in Mexico.
self-care for our collaborators, their families and the
general public. The goal is to raise awareness on be-
2017 and will be implemented at Hayden and Silver
- Safety Cells Forum. For the seventh year, we facili-
haviors that help to live a healthy lifestyle.
Bell in 2018.
tated this space for our collaborators to present their
best initiatives in accident prevention to make their
day-to-day tasks safer.
SUSTAINABLE DEVELOPMENT REPORT 2017
HEALTH AND SAFETY CERTIFICATIONS AND RECOGNITIONS
Mining Division, 2017
Certification
Sites certified
OHSAS 18001:2007
• 12 units certified in Mexico and Peru
Workplace Health and Safety Self-Management Program • 17 units accredited
The Mexican Mining Chamber (CAMIMEX) Casco de
• Mexicana del Cobre “La Caridad” Mine
Plata “Jorge Rangel Zamorano” prize, for reporting the
• Santa Eulalia Mine
lowest incident rates in the industry.
COMMUNITY DEVELOPMENT
G4-SO1, G4-SO2, G4-SO11
Community Development Model
Approach. The Grupo México Mining Division strives to foster the economic and social development
of our communities through our Community Development Model. This model is implemented in the
communities that neighbor our operations and is based on specific methodologies and procedures,
which include the community immersion process to encourage citizen participation in designing their
MINING DIVISION / PROMOTE
PARTICIPATIVE
DIAGNOSTICS
COMMITMENT
OF THE LOCAL
MANAGEMENT TEAM
PARTNERSHIPS
AND SHARED
RESPONSIBILITY
EXPANDING THE
VISION FOR THE
COMMUNITY
COMMUNITY
DIALOG ON
RESULTS
SPONSORS AND
VOLUNTEERS
COMMUNITY
COMMITTEES
PARTICIPATIVE
PROJECTS
“Casa Grande”
G4-SO1, G4-EC7, G4-EC8
own programs, and also in preparing social diagnostics to help us to mutually understand -company
Approach. “Casa Grande” embodies our Community Development Model, the goal of which is to improve the quality of
and community-, the socioeconomic reality of each region to identify their needs.
life of the residents in the communities where we operate. This model is put into practice as follows:
70
The eight phases of the social linkage process are structured to the company’s sustainable develop-
• 16 Community Development Centers - These community spaces are located in all the places where we operate
71
ment model and are strategically designed to include the participation of all sectors and actors from
and offer programs, workshops and courses. These activities focus on culture, art, sports and overall education.
the community, including educational institutions, government agencies and charity organizations and
associations, under a framework of shared responsibility and collaborative efforts to expand the vision
• Participative Diagnostics - We conduct participative diagnostics to listen to the community and ensure that deci-
for the development of the community and the continuity of programs and projects for the common
sions are made together.
good of present and future generations.
SUSTAINABLE DEVELOPMENT REPORT 2017 • Community Committees - Community committees
are formed with volunteer community leaders and com-
pany representatives who work together to evaluate sus-
tainable project proposals received from open calls to the
community.
Our mine operations in Mexico and Peru contribute to ed-
ucation for our communities through 13 schools sustained
or sponsored by the company, which we complement by
awarding scholarships for different levels of study, ex-
tending this to our collaborators and their families.
• Seed Capital - The company invites the community to
submit projects, which are then evaluated and successful
social projects receive seed capital to improve the quality
of life of the community.
• Productive Projects - We develop projects that
transform lives through training in productive skills. This
promotes the strengthening of individual skills and oppor-
tunities, and the diversification of local economies.
In 2017, we conducted 1,743 activities, 374 programs
and projects, with the participation of 12,303 communi-
ty and corporate volunteers, benefiting 112,272 people
through “seed capital” projects and productive projects.
With these efforts, we promote the formation of agents
for development and proactive leaders, strengthening
72
wellbeing in their communities.
We also continue to support the job training and selection
program ‘Forjando Futuros’ (Forging Futures), created to
respond, by strengthening skills, to the professional and
employment needs of the residents in the areas around
our operations in southern Peru, at the Cuajone and
Toquepala mines and the Ilo Smelter. The initiative has
been going since 2011, for youth in the Jorge Basadre
and Candarave provinces in the department of Tacna,
along the Chilean border; and also in the district of To-
rata, department of Moquegua.
The participants in the ‘Forjando Futuros’ program im-
prove their skills to access jobs in sectors such as mining,
construction and investment projects with public and pri-
vate organizations. With initiatives like this, we are taking
Development with Purpose to the communities in the ar-
eas where we operate. The program has three compo-
nents: trades, education fund and professional practice.
MINING DIVISION / PROMOTE
its effort to reduce the technological gap in rural areas in
Peru. This joint project between the Moquegua regional
government and Grupo México seeks to adapt and in-
corporate the use of ICT’s in the teaching and learning
process, benefiting 33,560 students and teachers in
Mariscal Nieto, Ilo and Sanchez Cerro in the region of
Moquegua, Peru.
To date, Grupo México has invested over US$33 million
in information and communication technologies for stu-
dents and teachers in the Moquegua region, Peru.
We also support a scholarship program in the United
States and participate in joint initiatives with charity or-
ganizations and the government. During 2017, we dis-
bursed US$163,496 in scholarships, sponsorships and
community linkage. We participated in initiatives such as
United Way, with direct contributions from the company
manifests in the following tracks: education and strength-
ening skills, health, nutrition, infrastructure and support
for the farming sector. In this regard, the Mining Division
contributes to the expansion of the water supply infra-
structure and irrigation technification infrastructure in the
provinces where we operate. An example of this is the
work to improve the irrigation infrastructure in Torata, in
the Moquegua region. This includes improving the water
reservoirs, installing pipelines, building support walls and
other water infrastructure maintenance works.
We also promote development and improve the quality of
life in our communities by constructing communication
routes opening access to different sources of income and
wellbeing. We supported the mobility of more than 4,000
people, fostering trade, education and the economic di-
versification of our people.
and also from our collaborators. United Way is a national
With the construction of the Ilabaya - Cambaya highway
organization, involving volunteers, donors and nonprofits,
we increased the connectivity of High-Andean commu-
which fundraises for community projects, promoting sus-
nities. This road infrastructure project is considered the
tainable solutions through education, financial stability
largest investment nationally under the Works for Taxes
and healthy lifestyles.
program. This project was promoted by the district mu-
73
nicipality of Ilabaya and financed by Grupo México. Rep-
Education and entrepreneurship
Infrastructure and services
resenting an investment of more than US$39 million, we
Another way to contribute to development is through
Of note is the Moquegua ICT (Information and Commu-
Our mine operations in Peru are located in a remote area
supported local trade, road safety and regional tourism to
educational activities for children and youth in our
nication Technologies) project, considered a pioneer in
in the south of the country in a rural environment, and
benefit 4 communities in Tacna, Peru.
neighbor communities, from their basic education
through to university.
we are contributing to the development of the region in
close partnership with the authorities and representative
local organizations. Our commitment to the community
SUSTAINABLE DEVELOPMENT REPORT 2017 MINING DIVISION / PROMOTE
Humanitarian Aid
Responding to community complaints and concerns
The Mining Division joined the efforts to aid those affected by the earthquakes that
We have a mechanism in place to respond to complaints and concerns in the community in relation to our industrial pro-
hit the state of Oaxaca and Mexico City in September 2017. We supported the com-
cesses, our staff ethics, and issues involving our activities. Through transparency and effective response to complaints,
munities of Juchitan and La Ventosa in Oaxaca, with demolition, removal of debris,
we strive to foster a relationship of trust and dialog between the company and the community.
delivering foodstuffs, structural assessments, providing temporary spaces, and offer-
ing the community psychological and emotional support.
Through this mechanism, we responded to three reports involving staff ethics and the impact of company activities this
year. These matters were addressed and concluded to the satisfaction of both parties.
We also contributed supplies and human capital. We sent backhoes with operators
and we made donations to the Mexican Red Cross to provide immediate assistance
Social investments
to the injured. We collected foodstuffs, household items and clothing at the 20 col-
In 2017, the Mining Division collaborated with a social investment and spending of US$60 million to contribute to eco-
lection depots we opened at our “Casa Grande” community development centers,
nomic development and creating opportunities for our communities.
where 250 volunteers gave more than 4,200 hours of their time.
In Mexico City, 24 of our expert mine rescue brigade members supported search and
rescue efforts in coordination with the Mexican Department of Defense and the state
civil protection. On September 20, our “Coyotes” and “Nahuales” brigades arrived at
a textile factory in the Obrera neighborhood of Mexico City. They immediately joined
the rescue efforts among the debris and helped to locate various bodies, managing
to rescue two people alive.
VOLUNTARY SOCIAL INVESTMENT AND SPENDING
US$
Mining Division, 2017
Community development programs, social linkage and productive projects
Infrastructure, works projects and equipping neighbor communities
Infrastructure in SCC neighborhoods
Total
$
$
$
$
4,995,021
37,558,049
17,944,493
60,497,563
74
75
SUSTAINABLE DEVELOPMENT REPORT 2017
PROTECT
MANAGEMENT APPROACH
Environmental management system
Caring for the environment is one of the pillars of our sustainability strategy. Mea-
suring our results and taking appropriate actions, we’ve implemented management
systems to properly manage the resources that form part of the environment in which
we operate.
Our environmental performance looks at different areas that cover the whole of the
lifecycle of our activities, classified into the following six lines of action:
RATIONAL USE OF
WATER AND NATURAL
RESOURCES
76
COMPREHENSIVE
WASTE
MANAGEMENT
REFORESTATION
AND PRESERVATION
OF BIODIVERSITY
REDUCE GHG
EMISSIONS FROM
PRODUCTION
EFFICIENT
ENERGY
USAGE
PREVENTION
AND CONTROL OF
ATMOSPHERIC
POLLUTANTS
MINING DIVISION / PROMOTE
Environmental investment
G4-EN31
The Mining Division invested US$325 million in environ-
mental projects in 2017, an 18% increase over the pre-
vious year.
-
Installation of Closed Circuits - We install closed
circuits in the mine processes and operations as pos-
sible, for continual recycling and total usage of pro-
cess water. This involves maintenance for recovered
water pumping systems at tailings dams.
ENVIRONMENTAL INVESTMENTS
Mining Division, 2017
Area
Water
Air
Soil
Waste
Biodiversity & reforestation
Management
Total
Amount
29.68
184.13
58.35
37.29
3.27
12.41
325.13
ENVIRONMENTAL
MANAGEMENT AND
PERFORMANCE
Water
G4-EN8, G4-EN9, G4-EN10, G4-EN22, G4-EN26
Approach. Water is the most important input in the oper-
ation of our extractive processes. Therefore, the Mining
Division installs the latest technologies to increase the
reuse and recycling of process and wastewater.
- Thickeners for water recovery - Thickeners help
to recover more water from the metallurgical process
through a process to remove solids. We’re installing
an additional seven high-efficiency thickeners at our
Peru operations with which we will be able to recover
104,000 m3/day at Toquepala and 140,000 m3/day
at Cuajone. This equipment will increase water reco-
very by 10%, meaning, 240 liters per second, equal
to the daily water usage of 172,800 people.
- Wastewater treatment plants - Treating wastewa-
ter supports the sustainability of the water cycle, and
avoids the overexploitation of aquifers and the conta-
mination of ecosystems. Our wastewater treatment
plants in Cananea and San Luis Potosi collect untrea-
ted municipal wastewater to then treat this water and
reuse it in our operations, nurseries and to indirectly
77
benefit 70,500 residents of these cities, through urban
sanitation and increased availability of clean water.
To ensure we are managing water appropriately, our mine
of the total water consumed at our mine operations was
Water consumption and recovery. In 2017, 71.83%
operations incorporate the following actions to maximize
the efficient use and reuse of water:
SUSTAINABLE DEVELOPMENT REPORT 2017 recovered water. We consumed 146.66 million m3 of first use water and 370.87
million m3 of recovered water.
In 2017, water discharges totaled 1.94 million m3 for the whole of the Mining
Division. These discharges were managed according to federal regulations and
requirements.
WATER CONSUMPTION BY SOURCE AND USAGE
(m3 millions)
Mining Division, 2015-2017
Consumption of first use water by source
Underground
Surface
Desalinated
Subtotal
Recovered water
Total
Percentage of usage
2015
71.3
56.24
0.86
128.4
291.14
419.54
69%
2016
99.58
50.5
0.85
150.93
358.57
509.5
70%
2017
99.08
46.92
0.66
146.66
370.87
517.53
72%
Energy and energy efficiency
G4-EN3, G4-EN6
MINING DIVISION / PROMOTE
Our principal projects include transporting ore over a
belt system in Cuajone, optimizing the haulage process
by replacing the rail system to reduce the energy re-
quired and minimize our use of fossil fuels. Also, the
high-pressure grinding rolls (HPGR) system in Toquepa-
la will significantly increase the energy efficiency of our
milling processes.
Over the last 3 years, we’ve reduced our energy usage in
copper production by 8%, which means we are requiring
less and less energy to produce a ton of copper in the
Mining Division.
Climate change
G4-EN15, G4-EN16, G4-EN19, G4-EC2
Effects of climate change. Our efforts in the fight
against climate change are focused on minimizing the ef-
fects and risks on our operations, guaranteeing the safety
of our collaborators and our neighbor communities.
ELECTRICITY CONSUMPTION
Mining Division, 2015-2017
Year Petajoules
2015
2016
2017
Petajoules
22.31
24.98
24.65
ENERGY CONSUMPTION
Mining Division, 2017
Year
Fuel
Electricity
Percentage
51.59%
48.41%
FUEL CONSUMPTION DETAILED
Mining Division, 2015-2017
Type
Diesel
Natural Gas
Fuel Oil
Coal Coke
LP Gas
Gasoline
Percentage
64.74%
27.71%
3.94%
1.94%
0.93%
0.74%
Energy consumption. In 2017, the Mining Division’s energy mix was comprised of
Energy Efficiency. One of the principles of our environ-
51.59% fuel, primarily diesel and natural gas, and the remainder is supplied pow-
mental strategy is energy efficiency, meaning the Mining
The risks associated with climate change include in-
er generated by third parties or other subsidiaries of Grupo México, as part of the
Division is constantly striving to produce more with less.
tense rains and droughts, and in this area we are de-
78
self-supply strategy. The total consumption of energy this year remained stable in
To fulfill this commitment, we are working on redesign-
veloping engineering projects to reinforce our water
79
terms of 2016, reporting an increase of a mere 0.5%.
ing, converting and adapting equipment, improving and
management systems and improve water reuse in our
FUEL CONSUMPTION
Mining Division, 2015-2017
Year
2015
2016
2017
Petajoules
24.76
25.68
26.34
reorganizing processes, and training our collaborators to
production chain.
optimize energy usage, making significant investments in
these areas.
Climate change represents a series of risks for our orga-
nization which we are prepared to face.
SUSTAINABLE DEVELOPMENT REPORT 2017 MINING DIVISION / PROMOTE
PROCESSED ORE
Mining Division, 2015-2017
Year
2015
2016
2017
Millions of tons
418.03
447.10
489.07
In 2017, we produced 16,271 tons of non-mine hazard-
ous waste, 76% of which was recycled, reused or treated
by third parties.
In our efforts to optimize resources, we try to reincorpo-
rate into our production processes the waste we gen-
erate, through reuse and recycling. Such is the case of
anodic muds from the electrowinning process, which we
reincorporate as raw materials to recover lead and pre-
our Infrastructure Division affiliates that generate electri-
cal power through high-efficiency combined cycle power
plants and the “El Retiro” wind farm. By replacing tra-
ditional energy sources with more efficient and renew-
able sources, in 2017 we reduced our emissions by over
552,000 tons of CO2eq.
During the year, we also capitalized on the power gener-
ated from our own energy sources. In Mexico, we capture
smelter gases from the heat recovery boiler to gener-
ate energy. In Peru, we generate power from renewable
sources with two hydroelectric plants, with a joint capac-
cious metals.
ity of 9 MW.
Materials
G4-EN1, G4-EN2
Given the nature of our operations, we primarily process
ore from deposits. Using pyrometallurgical and hydrome-
tallurgical processes, we extract copper, zinc, silver, gold
and molybdenum for sale. In 2017, we processed a total
489,070,000 tons of ore in three countries.
Also, we give value to other waste, such as byproducts
that can be used by third parties. In our quest for efficien-
cy, we use a portion of the byproducts we generate, such
as sulfuric acid, which we incorporate into the hydrome-
tallurgical processes.
81
The three principal types of risk that affect us are reg-
In 2017, our Scope 1 emissions were equivalent to
and consuming energy from clean and renewable sourc-
ulatory, physical and financial risks which, through our
actions and projects, we have converted into challenges
and opportunities for the business.
1,836,792 tons of CO2eq, and for Scope 2, we report
3,475,070 tons of CO2eq. This means that nearly 35% of
our GHG emissions come from the direct consumption of
es, and (iii) promoting the capture of greenhouse gases,
including reforestation projects to increase carbon ab-
sorption. Our mine operations have mitigated the indirect
fuels and 65% are indirect emissions from energy con-
GHG emissions by consuming clean energy supplied by
Emissions. The Mining Division is proactive in adopting
good practices in managing GHG inventories. We par-
ticipate in different national and international programs,
such as the GEI Mexico Program and the Carbon Disclo-
sure Project.
Also, in compliance with the National Emissions Regis-
ter under the 2012 Mexican Climate Change Law, our
sumption in our Mining Division.
GREENHOUSE GAS EMISSIONS
Mining Division, 2017
(Millions of tons CO2eq)
Type
Direct Emissions3
Indirect Emissions4
Percentage
1.84
3.48
GHG inventories are verified independently, action that
In 2017, our mine operations in Mexico generated 1,508
we have been taking since before this was mandatory,
tons of nitrogen oxide (NOx) and 17,208 tons of sulfur
preparing us to face the regulatory risks associated with
oxide (SOx); meanwhile in Peru, we generated 32,784
climate change.
tons of SOx and the emissions we generated in the Unit-
ed States were 186 tons of NOx and 17,238 tons of SOx.
In the United States, our emissions are regulated by the
Environmental Protection Agency (EPA), which requires
Mitigating Greenhouse Gases.
us to report emissions from fixed combustion sources.
We are working to mitigate emissions, taking actions
In Peru, we are not yet required to report our emissions.
aimed at: (i) more efficient energy use; (ii) developing
80
However, we have a consolidated inventory of green-
house gas emissions, which we present annually in this
Sustainable Development Report and to the Carbon Dis-
closure Project.
3 Direct Emissions: Include emissions from direct energy consumption,
calculated according to the 2017 CRE emission factors and the 2017
CONUEE combustion factors.
4 Indirect Emissions: Include emissions from power consumption, calcu-
lated according to the 2017 Mexican Power Board power consumption
emission factors (0.582 tons of CO2/MWh), published by the CRE.
SUSTAINABLE DEVELOPMENT REPORT 2017 MINING DIVISION / PROMOTE
Waste management and spills
G4-EN23, G4-EN24, G4-EN25, G4-MM3
Waste management. The majority of the waste pro-
duced by the Mining Division is characterized as inert or
low toxicity and of minimum risk to the environment. A
large portion of this waste (72%) is overburden, the ma-
terial generated when the deposit is opened, on remov-
ing the layers of earth to reach the ore we process. This
waste is considered sterile material, therefore its impact
on the environment is minimal.
Mine waste is disposed of in situ at our facilities, in
waste-rock heaps, tailings dams and slag heaps. These
infrastructure and engineering works adhere to the de-
sign and operation set by environmental regulations. At
the end of their operating life, the leaching systems will
be converted into heaps which will be treated according
to environmental regulations.
We produced 16,271 tons of non-mine hazardous waste,
76% of which was recycled, reused and/or treated by
third parties.
A total of 3,939 tons of non-mine hazardous waste were
transported from our operations to treatment centers or
sent for disposal by certified specialists, complying with
local regulations. Additionally, no non-mine hazardous
waste was exported this year out of the countries where
we operate.
We also produce waste that is recycled and requires
special handling, such as scrap metal and tires. Simi-
larly, the degraded organic waste produced during the
hydrometallurgical process is mixed with used oil and is
used as fuel for blasting or sold to a third party as an
alternative fuel.
Soil management and biodiversity
Restoration. The Grupo México Mining Division is com-
G4-EN11, G4-EN12, G4-EN13, G4-EN14, G4-MM1,
mitted to restoring the inactive lands at our sites in order
G4-MM2
to guarantee the preservation of their ecological value.
Management. The Grupo México Mining Division is
In 2017, the Mining Division restored 109 km2 of lands.
committed to identifying, understanding and managing
the impacts on the sites or species in the areas where
Biodiversity management in Mexico. Our Buenavista
we operate.
del Cobre is adjacent to the Sierra La Elenita, part of
1. Prevent and identify potential environmental impacts,
the West Sierra Madre range, which has high biodiversity
according to local regulations.
value, and within the Bird Conservation Area. We have
2. Proper handling of large volume waste, disposing of this
implemented plans to protect these areas and created
in waste-rock heaps, tailings dams and slag heaps.
the “El Mosco” Conservation Area and the Buenavista
3. Mitigate environmental impacts through compensation
del Cobre Environmental Management Unit, which has an
measures, such as the rescue and relocation of spe-
eco-path that offers educational and recreational activi-
cies, soil conservation, restoration and reforestation.
ties along its 1.8 km trail, receiving approximately 5,000
4. Develop closure plans to restore and recover the
visitors each year.
environmental conditions after our mining rights are
exhausted.
As part of our biodiversity conservation efforts, our
5. Leave the areas where we had operations in the best
Environmental Management Unit has 5.7 hectares of
Spills. We have infrastructure and procedures in place at
conditions possible, monitoring water bodies and im-
enclosures, which have been conditioned to replicate
Also, our smelting and refining processes include a com-
our operations to ensure the safe storage and handling of
plementing ongoing improvement actions according
the natural habitats of threatened species or in danger
prehensive waste management system, by which we can
materials, products and byproducts. We have emergen-
to local regulations.
of extinction, including the Mexican Gray Wolf and the
recover a portion of our metallurgic waste.
cy response plans that are immediately activated in the
Gould Turkey.
82
MINE WASTE
Mining Division, 2017
Material
Overburden
Tailings
Slag
Tons
341,529,187
151,756,292
1,816,658
event of accidental spills, to reduce impacts.
The protected land at our operations totaled 485 km2 in
In 2017, there was no spill having significant adverse im-
ecosystems with high biodiversity value or conservation
2017. Some of our operations are near or adjacent to
83
pact on the environment.
areas for some species. We have specific actions and/
or biodiversity management programs in Mexico and the
United States, for regulatory reasons and also as part of
our commitment to sustainability.
SUSTAINABLE DEVELOPMENT REPORT 2017 The strategy of the Environmental Management Unit fo-
fauna have been identified at our operations and in the
cuses on reproduction and release, and also regenerat-
surrounding areas that we want to help protect, respect-
ing ecosystems. This project clearly reflects our efforts to
ing the environmental conditions and, where necessary,
involve the community in the common challenge of pro-
we relocate the flora and fauna that would be affected
tecting our environment, and particularly the biodiversity
with the expansion of our work areas.
of Sonora.
Biodiversity management in Peru. At our operations
in Peru, we continue to make important investments and
maintenance actions as part of our Ite Bay remediation
Examples of this are our Mission mine (USA), where we
relocated specimens of Pima Pineapple Cactus, and our
Silver Bell mine (USA) with the Sonoran Desert Tortoise.
program in Tacna.
Protected species
Over a 12 kilometer by 1,500 meter stretch of land, this
successful contaminant removal program has created
PROTECTED SPECIES UNDER IUCN
CLASSIFICATION
Mining Division, 2017
Category
Vulnerable
Low concern
Insufficient information
No. of Species
1
42
1
NOM-059-SEMARNAT CLASSIFICATION
Mining Division, 2017
Category
In danger of extinction
Threatened
Subject to special
protection
No. of Species
0
11
10
the largest wetland with the greatest diversity of water
birds along the country’s coastline, and has also be-
come a tourist attraction contributing to the local econ-
omy. In 2017, the zone had more than 120 species of
water birds and is home to an average 76,000 migra-
tory and local birds.
84
Biodiversity management in the United States.
Silver Bell is one of our sites that has biodiversity con-
versation programs, like the Ironwood Forest National
Monument.
We have also been working to develop a wetland and
mesquite forest, characteristic of the arid and semi-arid
climates where we operate. Certain species of flora and
MINING DIVISION / PROMOTE
Reforestation. We have the largest tree production capacity in the mining industry
in Mexico, producing 4,966,200 trees in 2017. Over the last 5 years, we’ve increased
our annual tree production by 187%.
We have 6 tree nurseries and greenhouses, producing local species for the reforestation
and rehabilitation of ecosystems, including areas beyond our operations. On the one
hand, these nurseries contribute to biodiversity and to enriching the flora and fauna,
and on the other, they are natural carbon sinks, capturing CO2 from the environment.
MINE CLOSURES
MM10
Approach. Mining is a cycle. When the exploitation of a deposit reaches its end,
we have closure plans in place to manage the operation. Also, these plans contain
financial provisions to guarantee the preservation and restoration of the sites. These
are additional elements to our fulfillment of environmental regulations and our cor-
porate responsibility.
Closure plans are prepared taking into account both environmental and social goals.
In this regard, Grupo México surpasses the existing standards, executing closure
plans that are in keeping with our sustainability strategy. In total, we have 19 closure
plans for our Mining Division.
85
An example of the above are the efforts made at the old copper plant in San Luis
Potosi, for which a remediation and urban reintegration plan was developed, following
the highest standards of quality.
SUSTAINABLE DEVELOPMENT REPORT 2017 This confinement, which has been carried out in partnership with the local authorities, will create a
space for urban reintegration projects and real estate development for commercial and residential
zoning and recreation for the benefit of the community.
COMPLIANCE
Environmental certifications
In 2017, we maintained ISO 14001:2004 for four of our mines, 12 Clean Industry and 4 environmental
quality certifications given by the Mexican Environmental Protection Agency (PROFEPA).
ENVIRONMENTAL QUALITY AND CLEAN INDUSTRY CERTIFIED FACILITIES
Mining Division, 2017
Facility
Light Smelter Equipment Shop
Central Smelter Maintenance Shop
Smelter auxiliary services
Dust and effluent treatment plant
Precious Metals plant
Oxygen plant 1
Oxygen plant 2
Oxygen plant 3
Supply Maintenance Shop
Lime Plant
Guaymas Ocean Terminal
Cooper rod continuous casting plant
Hydrometallurgical plant - La Caridad
Mine concentrator services - La Caridad
Concentrator - La Caridad
Industrial Minera México - central shop
86
Fines and sanctions
G4-EN29
Certification
Environmental Quality
Clean Industry
Environmental Quality
Clean Industry
Clean Industry
Clean Industry
Clean Industry
Clean Industry
Environmental Quality
Clean Industry
Environmental Quality
Environmental Quality
Clean Industry
Clean Industry
Clean Industry
Environmental Quality
No Mining Division subsidiary received any significant fine or sanction in 2017 for violations of environ-
mental regulations in the regions where we operate.
TRANSPORTATION
DIVISION
TRANSPORTATION DIVISION GR OW
The Transportation Division has three guiding principles: Safety, Service and Pro-
ductivity. Safety is a precondition that prevails at all levels, with the goal of zero
accidents. Regarding service, our commitment is to improve the experience of our
customers and to go beyond their expectations. This conviction is directly tied to the
goal of being more productive, maximizing our efficiency in every process.
STRUCTURE OF THE DIVISION
AND PRINCIPAL SUBSIDIARIES
G4-7
The Transportation Division of Grupo México is represented by its subsidiary GMéxico
Transportes S.A.B. de C.V. (GMXT), comprised of:
Ferrocarril Mexicano, S.A. de C.V. (Ferromex)
Ferrosur, S.A. de C.V. (Ferrosur)
Intermodal México, S.A. de C.V. (IMEX)
Texas Pacifico LP, Inc. (TXP)
Florida East Coast Holdings Corp. (FEC)
Raven Transport, Inc.
88
TRANSPORTATION DIVISION / GROW
SIGNIFICANT CHANGES IN THE ORGANIZATION
G4-13
Grupo México Transportes initial public offering. In November 2017, Grupo México Transportes
announced the release of an initial public offering on the Mexican Stock Exchange under listing code
GMXT. The offering was over-subscribed 2.5 times the base offering, reflecting the company’s solid
financials and growth potential. This transaction was a major milestone for GMXT, being the largest
Mexican public offering in the last 5 years, and the largest transportation offering in Latin America,
which will help to drive the long term growth strategy of the Transportation Division and will strengthen
our presence in the local capital markets.
Acquisition of the Florida East Coast Railway (FEC). The Grupo México Transportation Divi-
sion continues to expand its presence in the United States with the acquisition of the Florida East
Coast Railway (FEC) covering the east coast of Florida, which represents the fourth largest economy
in the United States with a GDP of US$800 billion. The US$2.100 billion purchase is an important
strategic addition to the offering of transportation services in North America. This transaction will
strengthen the Transportation Division in terms of the diversification of products transported and
markets served.
89
SUSTAINABLE DEVELOPMENT REPORT 2017 PRINCIPAL SERVICES AND MARKETS
G4-4, G4-8, G4-9
Services. Grupo México delivers railroad freight transportation, multimodal and auxiliary services
through its Transportation Division.
RAILROAD TRANSPORTATION
MULTIMODAL AND AUXILIARY SERVICES
• Presence in 24 Mexican states and
• Door to door freight services
2 US states
• Coverage in 12 Mexican states
• Coverage of more than 80% of the
• 10 terminals
Mexican GDP
• 502 trucks, 3,850 container trailers
• 11,146 km rail network
• 1,222 chassis and 33 cranes
• Fleet of 862 locomotives and 34, 380 cars
The Transportation Division connects to five border points with the United States, with nine ocean
terminals connecting to the rest of the world. There is also a rail ferry service that runs between Coa-
tzacoalcos, Veracruz and Mobile, Alabama.
CONTRIBUTION BY SEGMENT
TONS-KILOMETER
1 Agriculture
2 Minerals
3 Intermodal
4 Chemical
5 Steel products
6 Energy
7 Cement
8 Automotive
9 Industrial
2017
21,081
9,964
5,731
5,058
4,865
3,996
3,458
2,678
2,275
TRANSPORTATION DIVISION / GROW
9
8
7
6
5
4
3
1
2
In 2017, Transportation Division sales were US$2.049 billion, a 16% increase over 2016, with record
EBITDA of US$880 million, 14% higher than the year before.
INVESTMENTS AND PROJECTS
G4-EC7, G4-EC8
Markets served. The customers served by the Transportation Division are active in the agricultural,
In the 19 years Ferromex has been in operation, we have invested US$6.455 billion in the Transpor-
automotive, cement, energy, mining, steel, chemical, intermodal and consumer goods industries.
tation Division. These investments have been used for capacity development of the railroad infrastruc-
ture, to increase the fleet and for track maintenance, among other projects. Among other things, 80%
The volumes transported in 2017, in tons-kilometer, were 7% higher than in 2016. This growth was
of the concessioned lines have been reconstructed, doubling the volume of freight transported, making
90
primarily driven by the intermodal, agriculture and mineral segments.
Mexico more competitive.
91
We invested US$2.386 billion in 2017, which includes the purchase of the FEC and various infrastruc-
ture projects and operations, highlighting the following:
Tunnel gauge expansion. The tunnel gauge expansion project in the Tepic zone of the Guadalaja-
ra-Nogales corridor and Mexicali was completed in 2017, with double-stack container trains beginning
SUSTAINABLE DEVELOPMENT REPORT 2017
TRANSPORTATION DIVISION / GROW
to pass through this Pacific region starting October 2017. This project represented a challenge be-
cause of its technical complexity and it was completed without major interruption of the rail service.
CUSTOMER RELATIONS
G4-PR5
Quality Policy. We work under the mission to deliver a safe, efficient and reliable transportation ser-
Piedras Negras South yard expansion. The construction of the Piedras Negras South yard was
vice, contributing to strengthening the connectivity and competiveness of the markets we serve. We
completed, increasing capacity 230% to receive, classify and dispatch trains, facilitating the growth in
have the vision of being the best option for transporting freight.
border traffics at this crossing.
Intensive refurbishment of track and bridges. In 2017, the overhaul of the “TA” line on the No-
Our philosophy and values follow the guiding principles of Safety, Service and Productivity.
gales - El Tajo corridor was completed, giving the line the capacity to move longer and heavier trains,
Customer Satisfaction. We conduct a monthly customer satisfaction review of our principle vari-
with higher-powered locomotives and better fuel performance, and with this, increasing the volume of
ables, including transit time, meeting delivery times for cars, car interchanges, and follow-up on
traffic in the Cananea and El Tajo zone.
complaints, among others. This information is reviewed quarterly with customers. The Customer Sat-
isfaction Index (CSI) in December 2017 was 89.2%, which reflects ongoing improvement and is our
Bypasses. We began construction of the Celaya (24.5 km) and Monterrey (36 km) bypasses, which
motivation to perform better.
will reduce greenhouse gas emissions in these urban areas and will also reduce accidents at level
crossings and improve the urban mobility, while increasing train speeds, decreasing fuel consumption
and reducing vandalism in the urban areas.
Reconfiguration of the Monterrey yard. The reconfiguration of the Monterrey yard was started,
which will double the capacity to receive, classify and dispatch trains.
PRINCIPAL RESULTS OF THE INFRASTRUCTURE PROJECTS AND OPERATIONS:
• Fuel savings (8%)
92
• Reduced risk of accidents
• 20.8% increase in train speed, delivering freight in shorter times
• Strengthening strategies to combat the theft of goods and train vandalism
• Decreased theft of goods and damage to equipment and facilities
93
SUSTAINABLE DEVELOPMENT REPORT 2017 PRO MOTE
WORKFORCE AND
LABOR PRACTICES
Workforce
G4-9, G4-10
We closed 2017 with a workforce of 11,230 collaborators
distributed through the Northern, Pacific and South-Cen-
tral regions of Mexico, and also the subsidiaries IMEX,
Texas Pacífico and Florida East Coast.
95% of our collaborators hold permanent contracts,
which gives our workforce stability.
COLLABORATORS BY AGE GROUP
Transportation Division, 2017
Age group
18-24
25-34
35-44
45+
Total
Collaborators
505
3,403
2,572
4,750
11,230
Freedom of association
G4-11, G4-LA4, G4-LA8
We have 8,586 unionized employees in the Transpor-
tation Division, representing 76% of the workforce. We
guarantee freedom of association and maintain ongoing
dialog with our collaborators and union representatives,
discussing issues of labor conditions and workplace
health and safety, which are reviewed regularly.
Transportation Division, 2015-2017
Year
2015
2016
2017
Collaborators
9,769
10,077
11,230
94
COLLABORATORS BY REGION
Transportation Division, 2017
Region
Corporate
Field
Intermodal
Texas Pacífico
Florida East Coast
Total
Collaborators
403
8,928
610
62
1,256
11,230
TRANSPORTATION DIVISION / PROMOTE
Equal opportunity and non-discrimination
G4-LA12, G4-HR3
Equal opportunity
The Transportation Division promotes labor inclusion and continuation of employment without discrimi-
nation and under equal opportunity. There is a cross-disciplinary approach to gender, where both men
and women have access to well-paid positions, in decent and safe working conditions.
The activities of the railroad transportation sector are predominantly performed by men. In 2017, 96%
of our workforce were men. However, at the corporate level, 33% of collaborators were women.
PARTICIPATION OF WOMEN BY COLLABORATOR CATEGORY
Transportation Division, 2017
Organizational
Level
Senior Management &
Supervisors
Senior Technicians
Junior Technicians
Specialists
Assistants
Total
Total
Collaborators
390
374
982
898
8,586
11,230
No. of Collaborators
that are Women
64
71
183
157
28
503
%
Women
16.41
18.98
18.64
17.48
0.33
4.48
Non-discrimination. In the Transportation Division, and throughout Grupo México, we respect the
rights of our collaborators. We fight discrimination, respecting the principles under which the company
operates. The most important instrument is our Code of Ethics, which establishes respect for human
95
dignity and the rejection of any type of discrimination. We do not discriminate on the basis of ethnic
origin, gender, age, disability, social condition, political affiliation, health condition, religious beliefs,
immigration status, opinions, sexual preference or marital status.
SUSTAINABLE DEVELOPMENT REPORT 2017 Reporting and suggestions line. The Transportation Division has an online mechanism for sugges-
tions and reporting known as “ayúdanos a ser mejores” (help us improve),1 where people can send us
their comments and questions.
It should be noted that this mechanism is not exclusive to employees, it is also open to customers,
suppliers and to the general public. The internal audit department receives firsthand all the information
submitted and channels this to the appropriate area for attention.
Base salary and wage equality
G4-EC5, G4-LA13
The Base Salary includes the basic wage, productivity bonuses, cash benefits and profit sharing,
where applicable. During 2017, the average Base Salary in the Transportation Division was equal to
more than 12 times the local minimum wage.
There is no difference in base salary between men and women. The company follows a technical
assessment system that looks at functions and responsibilities, not the person. Also, there is a salary
table that reviews performance without distinction of gender.
BASE SALARY WOMEN TO MEN RATIO
Senior
Management
& Supervisors
0.95
1.00
1.00
1.00
Senior
Technicians
0.98
0.86
0.62
1.00
Junior
Technicians
1.00
0.95
1.12
0.94
Specialists
1.00
0.89
NA
NA
Assistants
NA
1.00
1.00
NA
1.00
0.97
0.95
1.00
1.00
96
Region
Corporate
Field
Intermodal
*Texas Pacífco
*Florida East
Coast
*Salaries in US$
1 https://www.ferromex.com.mx/contacto/denuncias.jsp
TRANSPORTATION DIVISION / PROMOTE
Attracting and retaining personnel
G4-LA1
In an environment where there are different reasons for changing jobs, we’ve been working to reduce
our turnover rate, offering benefits above those required by law, training and career development plans.
In 2017, there were 375 new hires in the Transportation Division.
NEW HIRES
Transportation Division, 2015-2017
Region
Corporate
Field
Intermodal
Texas Pacífico
Florida East Coast
Age groups
Gender
18-24
7
24
15
7
4
25-34
37
150
75
5
14
35-44
5
22
27
3
13
45+
7
3
3
2
13
Male
29
178
113
15
37
Female
27
21
7
2
7
TURNOVER RATE*
Transportation Division, 2015-2017
TURNOVER RATE BY GENDER*
Transportation Division, 2015-2017
Year
2015
2016**
2017
Percentage
7.2%
11.2%
7.17 %
*The turnover rate includes dismissals, retirements and deaths.
**426 people were laid off during an organizational restructu-
ring and they were not replaced.
Gender
Male
Female
Separations
719
86
Turnover Rate
6.7%
17.1%
*This indicator should be read taking into account that most
collaborators are men.
97
TURNOVER RATE BY AGE GROUP
Transportation Division, 2017
Age Group
18-24
25-34
35-44
45+*
*This figure includes retirements.
Percentage
6.3%
6.9%
4.8%
8.7%
SUSTAINABLE DEVELOPMENT REPORT 2017 TRANSPORTATION DIVISION / PROMOTE
Performance review
G4-LA11
In 2017, all non-unionized personnel were reviewed. This process aims to assess the performance of
employees during the year, to identify areas of opportunity and training needs to then set goals for the
next year.
STAGES OF THE PERFORMANCE REVIEW
Transportation Division
Definition of goals
Carried out at the beginning of the year, based on criteria known to
the collaborator and their supervisor.
Follow-up on goals
Supervisors follow up with each collaborator during the year.
Annual performance review
The collaborator is reviewed at the end of the year and asked for
written comments on weaknesses and areas of opportunity.
WORKPLACE HEALTH AND SAFETY
Occupational Safety
G4-LA5, G4-LA6
Approach. One of the greatest challenges in our industry is fostering a culture of accident prevention
and leadership in workplace safety. The Grupo México Transportation Division is committed to dedicat-
ing resources and efforts to create safe workplace environments for our 11,230 collaborators.
99
Employee benefits
G4-LA2
We offer the following benefits above those required by law to contribute to the wellbeing of our collaborators:
Unionized personnel
Administrative personnel
- Savings fund
- Assistance for school supplies
- Vouchers for basic foodstuffs
- Life insurance
- Incentives to get involved in sports
- Sports facilities for railroad employees
- Travel expenses, where applicable
- Holidays according to the union calendar
- Assistance for funeral expenses
- Transportation service
- Life insurance
- Grocery vouchers
- Savings fund
- Major medical insurance
- Pension plan
- Cafeteria service
- Transportation service
- Personal loans
- Loan for computer equipment
- Parking
TRAINING AND CAREER DEVELOPMENT
Training
G4-LA9, G4-LA10
The railroad transportation sector demands a highly specialized type of training for personnel. Because of this, the
Transportation Division offers a comprehensive training program that seeks to continually improve the performance of
our collaborators.
98
In 2017, we provided 386,505 training hours, with an average 34 hours per collaborator.
TRAINING HOURS
Transportation Division, 2015-2017
Year
2015
2016
2017
Thousands of hours
309
310
387
SUSTAINABLE DEVELOPMENT REPORT 2017
As part of this strategy, we have health and safety committees in the different levels
of the organization, which ensure the improvement of all work areas. 11% of our
personnel participate directly in these committees, representing 100% of our collab-
orators. The types of health and safety committees that were active in 2017 were:
• Safety Committee
• Safety Subcommittee
• Health and Safety Commission
In addition to the operation of these committees, at the end of 2017, we started
the implementation of a Zero Tolerance Program, a behavior system that seeks to
establish best practices in workplace safety to generate a culture of prevention in the
company. This plan was developed following a review of accidents in recent years to
identify their causes and establish control measures. The initiative will be audited to
measure its effectiveness.
We run an ongoing awareness campaign on safety measures among employees via
corporate screens and screen savers on staff computers.
Performance: The accident rate was reduced 27% in 2017, compared with
2016.
10 0
Also of note is that 3, 683 collaborators were trained in occupational health and
safety, providing a total 34,594 man/hours of training on these topics in 2017.
INCIDENT RATE (IR)
Transportation Division, 2015-2017
4.00
3.00
2.00
1.00
0.00
5
1
0
2
5
3
.
3
6
1
0
2
7
9
.
2
7
1
0
2
6
1
.
2
No. of incapacitating accidents
x 200,000
IR =
Total man hours worked
SEVERITY RATE (SR)
Transportation Division, 2015-2017
1.50
1.00
0.50
0.00
5
1
0
2
0
3
.
1
6
1
0
2
9
0
.
1
7
1
0
2
5
1
.
1
SR =
No. of days lost
x 1,000
Total man hours worked
101
SUSTAINABLE DEVELOPMENT REPORT 2017
The safety of our personnel is our top priority, therefore we deeply regret the loss of
one collaborator in 2017. In response to this incident, the company supported the
collaborator’s family, offering assistance to expedite the processing of the life insur-
ance, and also covered the funeral expenses. Initiatives aimed at guaranteeing a safe
workplace have been strengthened, through training and safety programs.
2018 Goals. Our goal is to complete the year with no fatalities and to
reduce our occupational accident rate to below 1.80.
Occupational health
G4-LA7
Approach. To foster a healthy workplace and to change risky behaviors and
conducts observed in our collaborators, we have developed occupational health
programs and we continually monitor our indicators in this area.
OCCUPATIONAL HEALTH PROGRAMS FOR COLLABORATORS
Comprehensive health monitoring programs. Periodical medical examinations.
Monitoring and prevention programs for illnesses related to exposure to agents in
the workplace (noise, vibration, welding smoke).
Health promotion and education programs (high blood pressure, diabetes, nutri-
tion, obesity, etc.).
Vaccination campaigns (tetanus, hepatitis, influenza).
Aptitude monitoring (physicals, alcohol and drug testing, fatigue).
10 2
Performance. In 2017, we experienced an increase in the number of occupational
diseases, principally deafness and back problems, associated with the seniority and
TRANSPORTATION DIVISION / PROMOTE
OCCUPATIONAL DISEASE
RATE (ODR)
Transportation Division, 2015-2017
1.40
1.20
1.00
0.80
0.60
0.40
0.20
0.00
5
1
0
2
3
3
.
0
6
1
0
2
6
5
.
0
7
1
0
2
8
1
.
1
No. of cases of occupational diseases
x 200,000
ODR =
Total man hours worked
age of our train personnel. We are working on strengthening in-house campaigns on the correct use of personal protec-
tive equipment and the correct performance of duties, preventing health risks.
103
2018 Goals. Our goal for 2018 is to reduce our occupational disease rate by 10%.
SUSTAINABLE DEVELOPMENT REPORT 2017 COMMUNITY LINKAGE
G4-SO1, G4-SO2
For the Grupo México Transportation Division it is essential that we maintain a relationship of respect and linkage with
the residents of the communities through which our trains pass. To achieve this, we invest financial, technical and human
resources in community projects.
In keeping with this vision, Ferromex, Ferrosur and Intermodal México were recognized in 2017 as Socially Responsible
Companies. This distinction recognizes our ongoing efforts to achieve specific goals in sustainable development respon-
sibility to the community, customers and collaborators.
LINES OF ACTION IN OUR COMMUNITY LINKAGE
1. Solidarity
Dr. Vagón: “The Health Train”. Offers free medical services in remote communities where the train travels.
Donations. Deliver and mobilize support in emergency situations following natural disasters.
TRANSPORTATION DIVISION / PROMOTE
Solidarity
Doctor Vagón. The Health Train celebrated three years in operation in 2017, deliv-
ering 266,440 free comprehensive medical services to 61,212 patients in 30 com-
munities in 15 Mexican states, traveling a total 15,443 kilometers.
Dr. Vagón is a train equipped with a mobile clinic. It has 13 cars with doctor’s offices,
labs, specialization offices, pharmacy (audiometry, hearing devices and eyeglasses),
dormitories and a cafeteria for the doctors that travel to these remote communities,
delivering free health services.
The Health Train is a project that involves a large number of people at Ferromex and
Ferrosur to prepare the infrastructure and operations for the train to reach remote
areas, for which special works projects are undertaken to accommodate the train.
Ferromex Community Centers. Create spaces for recreation and the development of the communities through which
Of note are the efforts of Dr. Vagón from September 14 to 26 in the municipalities of
the train passes.
2. Support for Indigenous Communities
Community transportation. Making passenger transportation services on the Chihuahua-Pacific (Chepe) railroad
Ixtepec and Juchitan in Oaxaca in response to the state of emergency following the
earthquakes. For this special project, the train was urgently mobilized from the north
of the country, we provided 5,200 doctor’s visits and delivered 6,980 medications
available to communities in Chihuahua and Sinaloa, contributing to the economic and social development of these
and 24 hearing devices. Also, the train served as a first response center due to the
communities.
damage caused to various medical clinics in the state.
Free transportation of goods. Transporting foodstuffs and supplies free of charge to vulnerable groups in the Sierra
Tarahumara and anywhere else in the country in cases of emergencies due to natural disasters.
10 4
3. Interaction of the railroad with the community
Roadworks. Projection and completion of works projects to improve roadways, with safety as a priority.
Campaigns and workshops. Promote road safety at level crossings, and also through radio and television spots,
and social networks.
4. Fostering tourism
Donations. In response to the state of emergency that Mexico experienced after
the September 2017 earthquakes, the Grupo México Transportation Division used
105
the rail network to transport foodstuffs, supplies and construction materials to the
affected communities. We also transported heavy machinery and equipment to re-
move debris, and donated specialized material for precision cuts, equipment that was
very useful in accelerating the search and rescue efforts in various of the zones most
Fostering tourism and job creation in the Sierra Tarahumara through the Chepe tourist train.
affected in Mexico City.
SUSTAINABLE DEVELOPMENT REPORT 2017
In 2017, more than 243 tons of foodstuffs and personal hygiene items were trans-
ported to benefit 35,369 people.
Additionally, computers were delivered to schools near the train lines in Puebla, Tlax-
cala and Queretaro. These initiatives endeavor to aid youth to improve their quality of
life and to have access to modern equipment to continue their learning.
In December, the FEC runs the Santa Train to the Florida communities through which
the train passes. In 2017, the train delivered 16,000 toys and books to children.
Also, employees donated US$98,000 to the United Way, which supports education,
financial stability and health programs.
The Texas Pacífico railroad donated US$25,000 to the Red Cross to support efforts
in Texas following Hurricane Harvey.
Ferromex Community Centers. In 2017, Ferromex opened spaces for commu-
nity activities, known as Centros de Integración Ferromex, in: Penjamo, Guana-
juato and Cañada Morelos, Puebla, which were delivered to the municipalities for
their operation. The municipal authorities are using these centers to offer different
courses and workshops.
Supporting indigenous communities
10 6
Community transportation. In 2017, we affirmed our commitment to the
community by continuing to issue reduced rate cards to isolated low-income
communities, whose only means of transportation is the train. With these cards,
users pay only 20% of the ticket price to travel in economy class. This program
operates in collaboration with the State Commission on Indigenous Peoples and
the Chihuahua State Department of Social Development, and local agencies
along the rail route.
TRANSPORTATION DIVISION / PROMOTE
REDUCED RATE PROGRAM 2017
New reduced rate
cards delivered
1, 300
Valid reduced
rate cards
33,958
Passengers
transported
51,574 people
The program will continue in 2018 and we expect to deliver 10,000 new reduced rate cards.
This effort helps passenger train users to access medical services, educational institutions, commer-
cial areas, in addition to arriving on time for their jobs outside of the Sierra.
Free transportation of goods. As part of our social commitment in support of the communities of
the Sierra Tarahumara, we offer free transportation of goods, which consists of basic foodstuffs and
supplies donated by government agencies and charity organizations.
In the state of Chihuahua, 311 tons of goods were transported, impacting 24,412 people in four Tara-
humara communities: Creel, Temoris, Cuauhtemoc and Bahuichivo.
Organizations benefited from the transportation of goods and supplies:
• Mexican Red Cross
• Casa del Migrante Santa María de Guadalupe
• Consejo Asistencial Clínica Santa Teresitia
• Banco de Alimentos Cuauhtémoc
• Parishes
• Banco de Alimentos de Cuauhtémoc A.C.
• DIF Mexicali
107
SUSTAINABLE DEVELOPMENT REPORT 2017 Interaction of the railroad with the community
Infrastructure development. In Mexico, we are working on projects aimed at improving road safety in the commu-
nities through which the train passes.
In 2017, construction began on split-level vehicle crossings and pedestrian crossings in Guanajuato, Veracruz, Coahuila,
Sonora, Jalisco, Hidalgo, Puebla, Nayarit, Durango and Michoacan. These projects will increase road and pedestrian
safety, modernize the urban infrastructure, and reduce traffic congestion.
Of the projects mentioned, the construction of a vehicle overpass in Piedras Negras has been completed, representing
an investment of US$1,057,083.
We also began the construction of two bypasses, one in Celaya and another in Monterrey, which will improve safety in
the nearby areas, reducing the risk of accidents and ease traffic. The budgeted investment for the bypass projects is
US$148 million.
These efforts, among others, are aimed at reducing the accident rates. The figures show we’re on the right path.
2018 Goals. Our goal this year is to maintain an accident rate below 0.30 for both companies.
Training on accident prevention at level crossings. We are continually working with different groups and sec-
tors to raise awareness on the importance of respecting the rules of the road at level crossings to prevent accidents.
A radio and television campaign was conducted in cities in the states of Chihuahua, Guanajuato and Sinaloa, where
10 8
we have high accident rates. Also, informational talks were held with truck drivers in Jalisco, Durango, Guanajuato,
Coahuila and Sonora, to discuss the Official Mexican Standards on signaling, to foster respect for level crossings,
and to reduce accidents.
In partnership with the Mexican Railroad Association and the Mexican Red Cross, “Cuidado con el Tren” (Watch Out for
the Train) workshops were held in schools in areas near the train routes in states where we have higher accident rates. In
DIVISIÓN TRANSPORTES / PROMUEVE
FERROMEX ACCIDENT RATE
(ACCIDENTS / BGTK)
Transportation Division, 2012-2017
0.80
0.60
0.40
0.20
0.00
1.00
0.80
0.60
0.40
0.20
0.00
2
1
0
2
6
5
.
0
3
1
0
2
3
7
.
0
4
1
0
2
6
4
.
0
5
1
0
2
1
3
.
0
6
1
0
2
1
4
.
0
7
1
0
2
2
5
.
0
FERROSUR ACCIDENT RATE
(ACCIDENTS / BGTK)
Transportation Division, 2012-2017
2
1
0
2
4
9
.
0
3
1
0
2
5
5
.
0
4
1
0
2
2
5
.
0
5
1
0
2
7
7
.
0
6
1
0
2
9
3
.
0
7
1
0
2
9
4
.
0
109
SUSTAINABLE DEVELOPMENT REPORT 2017
2017, 36 schools were visited in seven states (Sinaloa, Chihuahua, Guanajuato, Que-
retaro, Michoacan, Tamaulipas, Estado de Mexico), directly impacting 7,750 children.
The Texas Pacífco and the FEC work closely with the organization “Operation Life-
saver” on prevention campaigns and projects to eliminate accidents and incidents at
level crossings.
Fostering tourism
Chepe and Chepe Express. The Transportation Division continues to support tourism
in the Chihuahua-Pacific region through a diversification of services, in synergy with
the state and federal authorities.
The Chepe provides a tourism service through the copper canyons, offering visitors
the opportunity to experience the Tarahumara culture and enjoy the natural resourc-
es of this region. The train supports the regional economy and creates direct and
indirect jobs.
Due to the increased traffic and demand for passenger train services in recent years,
a new service will be launched in 2018, Chepe Express, which will offer national and
international tourists a unique luxury travel experience.
11 0
TRANSPORTATION DIVISION / PROTECT
PROTE CT
ENVIRONMENTAL
MANAGEMENT AND
PERFORMANCE
Energy and energy efficiency
Fuel savings. The Automatic Engine Start Stop (AESS)
G4-EN3, G4-EN6, G4-EN27
system controls the engine start/stop system, reducing
Energy consumption. Our energy supply is primarily fuels,
fuel consumption when trains are stopped. This technol-
particularly diesel, which we use to operate the locomo-
ogy saved us 16,873,810 m3 of diesel, 38% more than
tives. Diesel represents 96% of the total energy con-
in 2016.
sumed by our transportation operations.
FUEL CONSUMPTION
Transportation Division, 2017
Year
2015
2016
2017
POWER CONSUMPTION
Transportation Division, 2017
Year
2015
2016
2017
Terajoules
18,552
16,794
19,908
Terajoules
107
107
127
DIESEL SAVINGS
(AESS System & Manual Operation
Millions of liters saved)
Transportation Division, 2017
Year
2015
2016
2017
Millions of liters
15.13
12.25
16.87
111
SUSTAINABLE DEVELOPMENT REPORT 2017 Energy efficiency. Our Transportation Division strives
Transportation Division, for which we have prepared ac-
to move more with less, with initiatives that contribute to
tion plans.
improving energy efficiency by perfecting operating pro-
cesses, which has improved fuel performance by 6% for
At Grupo México, we identify the risks, and monitor and
Ferromex and 3% for Ferrosur.
implement initiatives to be better prepared to address
FUEL PERFORMANCE (L/TGTK)
Transportation Division, 2017
Year
2015
2016
2017
FERROMEX
Transportation Division, 2017
Year
2015
2016
2017
L/TGTK
4.35
4.2
3.94
L/TGTK
6.24
6.25
6.08
damages to our facilities, from damages to the signaling
systems to landslides and floods that could interrupt the
railroad operation.
We have specific action plans for different scenarios,
aimed at minimizing the impact:
• Action plans and dissemination of the measures to be
used in the event of any natural phenomena.
• Multi-year program to reinforce bridges, unpaved and
paved roads, and drainage and natural water channels.
In 2017 we started testing a trip optimizer system. This
tool performs calculations to determine the optimal ton/
• Adjustments to train scheduling.
liter and horsepower required per ton-Km/liter. From
the analysis of the data, the system can automatical-
All our infrastructure construction and expansion proj-
ly control aspects such as the regulator and dynamic
ects are designed according to technical criteria set
11 2
brake, to reduce fuel consumption, increase speed, and
by the Mexican Water Board (CONAGUA) and the In-
improve handling.
ternational Boundary and Water Commission (IBWC),
Climate Change
to support and reduce the impacts of meteorological
phenomena and the surface water flows in the railroad
G4-EN15, G4-EN16, G4-EN19, G4-EC2
infrastructure and operation.
Effects of climate change. Climate change is a
growing risk, particularly for the operations of our
TRANSPORTATION DIVISION / PROTECT
Greenhouse Gas Emissions (GHG). The railroad releases only a quarter of the
greenhouse gas emissions (GHG) that trucks release, per ton-kilometer transported,
measured in millions of CO2 equivalents. In 2017, we emitted a total of 1,502,130
tons of CO2eq, 1.4% of which come from power consumption and the remaining
98.6% from the use of fossil fuels.
GREENHOUSE GAS EMISSIONS
(Millions of tons CO2eq)
Transportation Division, 2017
Direct emissions2
Indirect emissions3
1.48
0.02
Mitigation of Greenhouse Gases. The Transportation Division has taken various
important actions to reduce the consumption of diesel, including purchasing AC lo-
comotives, installing operating and fuel optimization devices in locomotives, and im-
proving operating practices. This, together with the use of renewable energy sources,
led in 2017 to the mitigation of 51,998 tons of CO2eq, equal to taking 11,134 cars
off the road for a year.
MITIGATION ACTIONS
Transportation Division, 2017
Initiatives
Savings of 16,873,810 m3 of fuel due to the Automatic
Engine Start Stop (AESS) systems
Consumption of 11,913,923 KWh of renewable
electricity from the Infrastructure Division’s “El Retiro”
Wind Farm
Total
Tons CO2eq
45,064
6,934
51,998
113
2 Direct Emissions: Include emissions from direct energy consumption, calculated according to the 2017
SEMARNAT emission factors and the 2017 CONUEE combustion factors.
3 Indirect Emissions: Include emissions from power consumption, calculated according to the 2017 Mexican
Power Board power consumption emission factors (0.582 tons of CO2/MWh), published by the CRE.
SUSTAINABLE DEVELOPMENT REPORT 2017 TRANSPORTATION DIVISION / PROTECT
Half of the Florida East Coast Holdings Corp. (FEC) locomotives have the flexibility to operate with
produce alternative fuels, and lead batteries are used to make new accumulators. The Transportation
diesel or LP gas, which helps us to optimize operating costs and reduce our environmental impact by
Division does not generate significant waste requiring special handling.
producing less greenhouse gas emissions.
The railroad continues to be an excellent option for transporting freight, being four times more efficient
in fuel consumption than trucks. This means that a single train, equal to 300 freight trucks, releases
75% less greenhouse gas emissions. In this manner, we are contributing to considerably reducing
pollution and the effects of climate change.
Materials
G4-EN1, G4-EN2
The railroad operations of our Transportation Division use primarily track, sleepers and ballast. Of note
is that we have a smelter slag reuse project, as a substitute for ballast.
MATERIALS
Transportation Division, 2017
Material
Ballast (m3)
Sleepers (pieces)
Track (tons)
Smelter slag used as ballast (m3)
2015
451,414
489,593
29,947
147,024
2016
337,016
664,814
33,788
110,878
2017
352,992
338,637
28,564
87,776
HAZARDOUS WASTE
Transportation Division, 2017
Waste
Oil
Muds (water treatment plant)
Alkaline batteries
Other solid hazardous waste
Tons
586.75
186.56
8.54
277.12
Our approach is the same with waste requiring special handling, some of which is reused and/or recy-
cled, such as scrap steel, obsolete vehicles or machinery, and wood sleepers.
Incidents with hazardous chemicals. We have mechanisms and procedures in place to prevent
and take action in emergency situations involving hazardous chemical products.
There are safety committees in place in nine Mexican states for the transportation of hazardous mate-
rials. Firefighters, civil protection and local industrial sectors serve on these committees, which, among
other things, conduct chemical drills and develop response mechanisms to protect the first responders
(fire and/or civil protection) to accidents involving hazardous materials.
Waste management and incidents involving hazardous chemical products
We also have a contingency program, which defines the guidelines to prevent chemical accidents,
G4-EN23, G4-EN24, G4-EN25
11 4
Waste management. We generated 1,059 tons of hazardous waste, which we manage in strict
adherence to regulations for handling, storage and sending for recycling and/or final disposal.
A large portion of this waste is reused by authorized third parties and the rest is sent for controlled
confinement. This waste includes lubricant oil (58% of the total hazardous waste) which is used to
restoration of environmental impacts, and return to normal operations.
115
SUSTAINABLE DEVELOPMENT REPORT 2017 ACTION PROTOCOL IN CASE OF CHEMICAL SPILLS
Prevention
The prevention actions the safety committee will take are defined.
Response
On the occurrence of an incident, the chemical emergency contingency plan is
activated.
Remediation
With the emergency under control, the track is reported as clear and the dama-
ges to the track and surrounding areas are surveyed.
The damages to equipment and infrastructure are assessed and quantified, as
well as the environmental restoration at the scene of the accident (as applicable).
Spills. In 2017, we had a spill of 500 tons of copper concentrate in the Pacific region (PKT 183+800).
The spill response protocol was activated immediately, removing and disposing of the concentrate in
an environmentally safe way, without affecting the environment or the nearby communities.
Water*
G4-EN8, G4-EN9, G4-EN10, G4-EN22, G4-EN26
Water is primarily used in the Transportation Division for washing locomotives and cars, and also for
the cooling systems. In 2017, we consumed 252,603 m3 of water.
74% of first use water came from underground sources, 23% from the city water supply and 4% from
water trucks. There was a 16% decrease in water consumption this year, representing savings of 47,176
m3. We also have an awareness program to promote the efficient use of water among our collaborators.
11 6
WATER CONSUMPTION - UNDERGROUND
Transportation Division, 2017
Year
2015
2016
2017
m3
148,568
163,661
185,777
TRANSPORTATION DIVISION / PROTECT
WATER CONSUMPTION - SURFACE
Transportation Division, 2017
Year
2015
2016
2017
m3
105,663
136,118
66,826
Biodiversity
G4-EN11, G4-EN12, G4-EN13, G4-EN14
Most of our Transportation Division operations are not
located in protected areas, with the exception of 25 ki-
lometers of track that cross an area that was declared
protected after the track was built.4
When our operations could impact the biodiversity by
passing through zones declared protected, we comply
with the requirements of the environmental authorities
from the design stage, construction, to operation. We
also have monitoring mechanisms in place for clearing
vegetation and soil erosion and compaction.
Nature (IUCN) classifications, have been found around
our rail operations and projects.
COMPLIANCE
Environmental certifications
In 2017, five of our sites maintained environmental
quality certifications given by the Mexican Environmen-
tal Protection Agency (PROFEPA) under this voluntary
program that requires an environmental audit to review
the company’s environmental risk processes and regu-
latory compliance.
SITES CERTIFIED IN ENVIRONMENTAL QUALITY
Transportation Division, 2017
Shop and Fueling Zone in Tierra Blanca
Shop and Fueling Zone in Veracruz
Railcar Shop in Coatzacoalcos
Shop and Fueling Zone in Orizaba
Fueling Zone in Puebla
We routinely monitor and assess potential impacts, to
establish preventive and corrective measures. In this
Fines and sanctions
regard, we have restoration plans in place that include
G4-EN29
reforestation and subsequent maintenance to ensure the
Fines and sanctions. In 2017, no Transportation Di-
117
survival of specimens that are relocated. Also, fauna that
vision subsidiary received any significant fine or sanction
may be effected are rescued and relocated.
for violations of environmental regulations in the regions
where we operate.
No protected species, according to the NOM-059-SEMAR-
NAT-2010 or International Union for the Conservation of
* The water consumption reported considers only the operations of Ferromex, Ferrosur and IMEX. We are working on consolidating
the water consumptions in the United States.
4 The protected zones are located in the states of Baja California, Sonora,
Sinaloa, Colima, Coahuila and Veracruz.
SUSTAINABLE DEVELOPMENT REPORT 2017 INFRASTRUCTURE
DIVISION
INFRASTR UCTURE DIVISION / GROW
GROW
STRUCTURE OF THE DIVISION
AND PRINCIPAL SUBSIDIARIES
G4-7
The Infrastructure Division of Grupo México is represented by its subsidiary México
Proyectos y Desarrollos, S.A. de C.V. (MPD), comprised of:
México Compañía Constructora, S.A. de C.V. (MCC)
Grupo México Servicios de Ingeniería, S.A. de C.V. (GMSI)
Controladora de Infraestructura Petrolera México, S.A. de C.V. (PEMSA)
Controladora de Infraestructura Energética México, S.A. de C.V. (CIEM)
Concesionaria de Infraestructura del Bajío, S.A. de C.V. (CIBSA)
PRINCIPAL SERVICES AND MARKETS
G4-4, G4-8, G4-9
Customers and services. Through the Infrastructure Division of Grupo México,
we offer engineering and construction services, power generation, and also onshore
and offshore drilling as well as the leasing and operation of oil rigs; we also operate
and maintain highways under concession.
The Grupo México Infrastructure Division has more than 80 years experience and
over 200 major projects completed in 24 Mexican states.
Construction
Engineering Services
119
• Public and private infrastructure
• Comprehensive engineering services
projects, including: hydroelectric and
for industrial projects, principally in
storage dams, highways, thermoelectric
the mining, metals, chemical, petro-
plants, railroad projects, mining proj-
chemical and oil sectors.
ects, manufacturing plants, petrochem-
ical plants, and residential projects.
SUSTAINABLE DEVELOPMENT REPORT 2017INFRASTRUCTURE DIVISION
INFRASTR UCTURE DIVISION / GROW
Drilling
Power Generation
in sales of US$302 million. This represents an 18% in-
Mining sector projects. México Compañía Construc-
• Drilling for the exploration of oil, wa-
• Power generation through two natural
crease over 2016. The subsidiary also reported EBITDA
tora worked on the reinforcement and maintenance of
ter and geothermal energy, including
gas combined cycle power plants (La
related services, such as direction-
Caridad I and La Caridad II), with an
al drilling, cementation and drilling
installed capacity of 516 MW, and a
fluids.
74 MW wind farm (El Retiro) with 37
of US$108 million.
the containment walls of Tailings Dam No. 3 at the Mining
Grupo México Autopistas reported a record US$35 mil-
the work in phase 2 of a new tailings dam, guaranteeing
lion in revenue from the Salamanca-Leon highway, and
a 10-meter dam wall. This year, we completed work on
Division’s Buenavista del Cobre site and also continued
• Onshore and offshore drilling equip-
wind turbines.
an average weighted daily traffic of 11,970 vehicles, rep-
the Quebalix IV dam, the construction of a contingency
ment leasing (5 jack-up and 2 mod-
ular rigs).
Highway infrastructure operation
• Operation and maintenance of the Salamanca-Leon highway, with an average
daily traffic of 11,970 vehicles (2017).
resenting a 23% increase in revenue over 2016. Traffic
dam and a recovered water reservoir.
was also 39% above the figure committed to the De-
partment of Transport and Communications.
We also worked on the construction to raise the dam
wall on Tailings Dam No. 7 at the Mining Division’s La
INVESTMENTS AND PROJECTS
Caridad mine in Nacozari de García, Sonora.
G4-13, G4-EC7, G4-EC8, G4-EN27
During 2017, Grupo México Servicios de Ingeniería
Results. Infrastructure Division sales were US$582 million in 2017, 4% less than
The Infrastructure Division has been contributing to the
completed the detailed engineering for the Toquepala
in 2016. EBITDA was US$233 million, representing a year-over-year decrease of
development of the infrastructure in Mexico for over
mine in Peru.
16%, principally attributed to the reduced usage of the PEMSA equipment due to
eighty years. In 2017, we invested US$27 million in
the suspension of various contracts and the reduction of the rig rates by PEMEX.
projects. Some of our principal projects are described
Railroad sector projects. México Compañía Con-
México Compañía Constructora sales were US$138 million, a 13% increase over
2016, while Grupo México Servicios de Ingeniería reported an 8% year-over-year
increase with sales of US$18 million.
12 0
following:
structora continued to work on projects for the railroad
industry, expanding all the tunnels along the "Plan de
New Mexico City Airport. For the new Mexico City
Barrancas" which will allow double-stack trains to travel
airport, México Compañía Constructora built a 14 km
on the Guadalajara-Tepic line. Construction is complete
access rail line to carry the construction materials and
on the expansion of the automotive terminal at Monter-
121
In 2017, Controladora de Infraestructura Petrolera México reported sales of US$111
part of the basic infrastructure for this megaproject.
rey, which included reconfiguring the tracks in the main
million, with EBITDA of US$47 million. The weighted operating efficiency for the rigs
yard and a fueling zone was constructed at Rio Escon-
this year was 95.8%.
In terms of production and sales, 2017 was a record year for Controladora de In-
Highway infrastructure. Regarding the Salaman-
dido, Coahuila.
ca-Leon highway, México Compañía Constructora com-
pleted construction of the Leon access route and the
fraestructura Energética México. The increased operation of the generating plant in
inland port in Silao, Guanajuato.
Nacozari, Sonora, due to increased demand from our self-supply partners, resulted
SUSTAINABLE DEVELOPMENT REPORT 2017 Grupo México Servicios de Ingeniería was awarded the
close contact with our customers, listening to their opin-
Ferromex tender for the Celaya bypass project, a project
ions through logs, notices, meeting minutes, complaint
that will be two years in development.
and suggestion boxes, website, email, among other me-
dia. The information we gather is analyzed and used to
Maintenance of the combined cycle power plant.
develop strategies to enhance our experience and to im-
In 2017, we made modifications to the “La Caridad I”
prove the satisfaction of our customers and users.
combined cycle power plant as part of a scheduled
maintenance program, to improve the productivity and
During its 11 years, México Compañía Constructora has
profitability of the plant. “La Caridad II” will receive
maintained ISO 9001 quality management certification.
maintenance in 2018.
PEMSA also holds ISO 9001 certification for its Carmen
CUSTOMER RELATIONS
G4-PR5
Sector administrative offices, cement plant and Sonora
rig. Also, Concesionaria de Infraestructura del Bajío, as
operator of the Salamanca-Leon highway, celebrates its
second year with an ISO 9001 certified quality manage-
Quality Management. In the Infrastructure Division,
ment system.
we are continually striving to deliver our services to the
highest standards of quality. To achieve this, we maintain
12 2
I NFRASTR UCTURE DIVISION / PROMOTE
PROMOTE
WORKFORCE AND LABOR
PRACTICES
Workforce
G4-9, G4-10
COLLABORATORS BY SUBSIDIARY
Infrastructure Division, 2017
Subsidiary
MCC
GMSI
CIEM
PEMSA
CIBSA
Total
Collaborators
2,159
382
75
531
215
3,362
COLLABORATORS BY AGE GROUP
Infrastructure Division, 2017
Age Group
18-24
25-34
35-44
45+
Total
Collaborators
531
1,058
1,121
652
3,362
Freedom of association
G4-11, G4-LA4, G4-LA8
We have 2,229 unionized employees in the Infrastruc-
ture Division, representing 66% of the workforce. We
guarantee freedom of association and have mechanisms
in place for ongoing dialog with our collaborators and
their union representatives, discussing issues of labor
conditions and workplace health and safety, which are
In 2017, we had an average total workforce of 3,362
reviewed regularly.
collaborators in our 5 principal subsidiaries. 84% of
these collaborators have a permanent contract, which
Equal opportunity and non-discrimination
gives our personnel stability in their employment.
G4-LA12, G4-HR3
COLLABORATORS
Infrastructure Division, 2015 – 2017
Year
2015
2016
2017
Collaborators
2,556
3,292
3,362
Equal opportunity. As with the Mining and Trans-
portation divisions, the workforce of the Infrastructure
123
Division is made up of mostly men. However, we are
continually promoting a greater participation of women.
In 2017, 11% of our workforce were women.
SUSTAINABLE DEVELOPMENT REPORT 2017
PARTICIPATION OF WOMEN BY COLLABORATOR CATEGORY
Infrastructure Division, 2017
Category
Collaborators
No. of Collaborators
that are Women
%
Women
Senior Management &
Department Heads
Technicians
Specialists
Assistants
Total
150
823
313
2,076
3,362
15
179
66
102
362
10
22
21
5
11
Non-discrimination. At Grupo México, including the
Base salary and wage equality
Infrastructure Division, we respect the rights of our col-
G4-EC5, G4-LA13
laborators. The Code of Ethics is our guiding reference,
The Base Salary includes the basic wage, productivity
fighting discrimination and operating with principles and
bonuses, cash benefits and profit sharing, where ap-
values. Our companies have zero tolerance for discrim-
plicable. During 2017, the average Base Salary in the
ination on the basis of ethnic origin, race, gender, age,
Infrastructure Division was equal to more than 6.7 times
disability, social condition, political affiliation, health
the local minimum wage.2
condition, religious beliefs, immigration status, opinions,
sexual preference or marital status.
In terms of the base salary and the men to women ratio,
we continue working to ensure equal pay across all pro-
Any collaborator that is witness to or the victim of any
fessional categories.
form of discrimination is encouraged to report the in-
12 4
cident via the Grupo México reporting line. This formal
mechanism is operated by a third party and offers a
phone number, email and website to report incidents.1
No case of discrimination was reported in the Infrastruc-
ture Division in 2017.
I NFRASTR UCTURE DIVISION / PROMOTE
Attracting and retaining personnel
G4-LA1
During 2017, the average workforce of the Infrastructure Division was 3,362 collaborators, represent-
ing a 36% increase over 2016 and a turnover rate of 21%.3 This turnover rate is due to the nature
of the sectors in which the division is active, as our hiring is based on the demand and temporality
of our projects.
NEW HIRES
Infrastructure Division, 2017
Subsidiary
MCC
GMSI
CIEM
PEMSA
CIBSA
Age groups
18-24
138
2
1
7
8
25-34
243
14
2
28
26
35-44
151
5
2
22
10
45+
201
9
1
13
13
Gender
Male
687
20
5
56
40
Female
46
10
1
14
17
TURNOVER RATE
Infrastructure Division, 2015-2017
Year
2015
2016
2017
Percentage
16.2
15.4
21
125
1 For more information on our Code of Ethics and reporting procedure, see the section on Human Rights in the Corporate Governance chapter.
2 Considering the Base Salary (BS) and the Minimum Wage (MW), the BS/MW average is calculated weighting the BS and MW published in the Official
Federal Gazette, based on the number of Infrastructure Division collaborators in each territory. The base Salary includes the basic wage, productivity
bonuses, cash benefits and profit sharing, where applicable.
3 This rate does not include layoffs following the completion of short and medium term projects.
SUSTAINABLE DEVELOPMENT REPORT 2017
I NFRASTR UCTURE DIVISION / PROMOTE
Benefits for collaborators
G4-LA2
Universidad I. The Universidad I project was launched
During this first year, we launched Universidad I with
in 2017, a virtual campus of the Infrastructure Division
training and certification on the Code of Ethics, as part
The Grupo México Infrastructure Division contributes to the wellbeing of our collaborators offering the following bene-
that started to be developed in 2016. With the creation
of the institutional programs track. We also proposed
fits above those required by law:
Salary-related
Others
Life insurance
Major medical insurance
Family protection insurance
Savings fund
Grocery vouchers
Productivity bonus
Pension fund
Retirement plan
Assistance for funeral expenses
Transportation service
Cafeterias for collaborators
Scholarships for employees and their children
Share purchase plan for employees
TRAINING AND CAREER DEVELOPMENT
G4-LA9, G4-LA10
Achieving a high level of quality through our broad range of services requires constant learning and training to develop
a high degree of specialization. In 2017, we delivered a total of 25,1054 training hours, which translates into an average
22.15 training hours per collaborator.
12 6
We also helped our collaborators to develop their professional training, offering them financial assistance to pursue
outside training or education. Additionally, we offer consulting to our personnel who are ending their professional ca-
reers, through in-house training and planning sessions for retirement.
4 These training hours are delivered over the digital platform “Universidad I”; during this first phase only non-unionized personnel and middle management
who had access to a computer participated. Unionized personnel will be included soon.
of this platform, we will institutionalize the processes to
adding 700 collaborators. At December close, we had
professionalize the workforce, through useful content
501 students, including both unionized and adminis-
according to the needs of each subsidiary.
trative personnel. Our goal for 2018 is to reach 1,000
The goal of Universidad I is to promote a culture of
students.
self-training, focusing content on the needs of the sec-
Success Factors. We’ve implemented the Success
tors in which we participate and generating didactic
Factors model to unify a framework of competencies
models that ensure the effectiveness of the learning and
for all the industries in which the Infrastructure Division
its application in the real world.
operates, considering our broad spectrum of activities.
This model includes modules to manage remuneration
This virtual university has three areas to achieve its stra-
processes, recruitment and performance.
tegic goals:
Performance review
-
Institutional programs – covers the personal de-
G4-LA11
velopment programs on institutional competencies,
We have a talent development plan in the Infrastruc-
and also training in the use of institutional tools as
ture Division, which culminates with a personnel review
well as occupational health and safety.
process. This plan arose in 2016 to open opportunities
for our collaborators, and also to increase productivity,
- Technical programs – offers training programs on
estimate potential, and to detect training needs and rec-
general technical topics, specific technical skills for
ognize talent.
each sector in which we operate, and also the devel-
opment of highly specialized skills and competencies.
127
- Special programs – furthering career plans and
succession plans, and also support to complete
bachelor and master’s degrees and diploma courses,
in special cases.
SUSTAINABLE DEVELOPMENT REPORT 2017 I NFRASTR UCTURE DIVISION / PROMOTE
All our workforce is represented by 2% of collaborators, who serve on the health
and safety commissions. Additionally, all our contractors are covered by the Health
and Safety Management System.
Certifications and Programs. In 2017, México Compañía Constructora main-
tained its OHSAS 18001 management systems certification for the eleventh con-
secutive year. Also, the PEMSA Carmen Sector administrative offices, cement plant
and Sonora rig maintained their certification. We also maintained Ship and Port
Facility Protection Certifications under the International Ship and Port Facility Code
(ISPS Code) and Safety Management Certificates under the International Safety
of Life at Sea Convention (SOLAS), accrediting our safety management in compli-
ance with the Guidelines on Implementation of the International Safety Management
(ISM). Additionally, we adhere to the Workplace Health and Safety Self-Manage-
ment Program (PASST 1st level).
Our Institutional Safety and Protection On Board Program fosters and strengthens a
culture of safety on oil rigs. The core areas the program covers are fire evacuation
and general rig evacuation procedures, handling spills, and also the procedure to
follow in cases of man overboard.
Performance. In 2017, our accident rate was 34% lower than in 2016, reporting
only 11 incapacitating accidents. Also of note is that we closed 2017 with more than
1,557 days without an incapacitating accident at our “La Caridad I” and “La Caridad
129
II” combined cycle power plants.
The talent development plan is comprised of the following elements:
TALENT DEVELOPMENT PLAN
Infrastructure Division
Strategic Map for the
Infrastructure Division
We plan the goals for the company, identifying the cause-effect rela-
tionship between the components of the strategy.
Competencies Model
Based on the structure used in the Mining Division, but adapted to the
needs of the Infrastructure Division.
Talent Platform
SAP Success Factors and KHOR.
During 2017, we made progress on the authorization of goals. In 2018, we will complete the evalu-
ation phases:
Training
Setting goals
Approval
of goals
Competency
assessment
Performance
review
OCCUPATIONAL HEALTH AND SAFETY
12 8
Occupational safety
G4-LA5, G4-LA6, CRE6
Approach. For all Grupo México, including the Infrastructure Division, workplace safety is our high-
est priority. In keeping with this level of commitment, we have established actions to guarantee the
physical safety of our personnel and our contractors.
Our Infrastructure Division has health and safety committees to ensure our worksites do not put our
collaborators at risk.
SUSTAINABLE DEVELOPMENT REPORT 2017
2018 Goals. In 2018, our goal is to maintain zero fatal accidents and to reduce our
incapacitating accident rate by 10%.
Occupational Health
G4-LA7
Approach. In the Infrastructure Division, we’re committed to protecting the health
of our personnel. We are also constantly looking to extend the culture of health pre-
vention and safety to the families of our collaborators and to the community through
education programs, consulting, risk control and prevention, and also the treatment
of diseases and illnesses.
COMMUNITY LINKAGE
G4-SO1, G4-SO2, CRE7, G4-EC8
Casa Grande5
The Infrastructure Division strives to maintain strong ties with the community, iden-
tifying together needs and opportunities to improve the quality of life of local res-
idents. To achieve this, we’ve adopted and put into practice the Mining Division’s
Casa Grande community development model.
Social Inclusion and Impact Assessment. It’s important for the Infrastructure
Division that our actions in the community be supported by studies, direct consul-
13 0
tations and reliable sources of information to contribute to the sustainable develop-
ment of the communities that neighbor the operations of our subsidiaries.
5 For more information on the Casa Grande model and its management tools, see page 70 in the Mining
Division chapter.
INCIDENT RATE (IR)
Infrastructure Division, 2015 – 2017
1.20
0.90
0.60
0.30
0.00
0.1
0.05
0.00
5
1
0
2
6
9
.
0
6
1
0
2
1
4
.
0
7
1
0
2
7
2
.
0
IR =
No. of incapacitating accidents
Total man hours worked
x 200,000
SEVERITY RATE (SR)
Infrastructure Division, 2015 – 2017
131
5
1
0
2
7
0
0
.
6
1
0
2
5
0
0
.
7
1
0
2
3
0
0
.
SR =
No. of days lost
Total man hours worked
x 1,000
SUSTAINABLE DEVELOPMENT REPORT 2017 I NFRASTR UCTURE DIVISION / PROMOTE
We prepare social viability studies, shared value diag-
Division endeavor to contract local personnel and pur-
nostics and social impact assessments for our energy
chase products and services from local suppliers, to gen-
that women face in the region. The Mujeres Productivas project offers alternatives
through workshops and programs to develop skills for self-employment. Also, in
sector projects, as required by the Mexican Department
erate economic spillover in the regions where we operate.
2017 in the Bajio region, we launched a sustainable school orchard project, which
of Energy for energy and hydrocarbon projects. The goal
created linkage with government agencies.
is to identify the social and environmental impacts in the
Principal actions 2017. We launched calls for social
area of influence of a project, considering the identifi-
projects in the neighbor communities to our Salaman-
Through México Compañía Constructora, we implemented a program that fosters
cation, characterization, prediction, and valuation of the
ca-Leon Highway (OIBSA) and Ciudad del Carmen,
the participation of contract companies in Cananea to establish a fund of in-kind
potential consequences resulting from the project, to
Campeche (PEMSA) operations. The projects received
resources, the goal of which is to recover public spaces under an approach of com-
take mitigation measures and develop social manage-
were reviewed by the community committees, the mem-
pany-community co-responsibility.
ment plans.
bers of which are volunteers from the community and
the company. The successful projects received seed
Humanitarian aid
These types of studies are prepared considering our
capital from the company and also support and consult-
Donations and response to earthquakes. In response to the earthquakes oc-
principal stakeholders in the areas impacted by the proj-
ing for their implementation. The committees approved
curring in Mexico in September 2017, the Infrastructure Division activated volunteer
ect, which may include recognized community leaders,
6 projects for the Salamanca-Leon region and 7 for Ci-
and socioemotional plans and put into operation donation collection centers, to re-
charity organizations, government agencies, community
udad del Carmen, 6 of which were launched this year.
ceive basic needs items to deliver these to affected families in the state of Oaxaca.
associations and organized groups, among others.
Additionally, 9,240 people participated in 54 landmark
Community committees were formed from these ac-
and other productive projects at our community devel-
tivities and are key to developing a community linkage
opment centers in Juchitan de Zaragoza, Oaxaca and
model. Through them, we can establish mechanisms
Ciudad del Carmen, Campeche this year.
for social participation, such as our invitations to submit
project proposals to receive funding.
Through Operadora de Infraestructura del Bajío (OIBSA),
13 2
in 2017 we supported the Mujeres Productivas (Produc-
In this manner, we ensure different sectors of the com-
tive Women) project, the goal of which is to improve un-
munity are involved in decision making to favor their
favorable conditions such as low education levels, lack
economic, social and cultural development.
of sources of employment, and various cultural aspects
Also, as part of our actions to positively impact commu-
nity development, the subsidiaries of the Infrastructure
133
SUSTAINABLE DEVELOPMENT REPORT 2017 I NFRASTR UCTURE DIVISION / PROTECT
PROTECT
ENVIRONMENTAL
MANAGEMENT AND
PERFORMANCE
POWER CONSUMPTION
Infrastructure Division, 2015 - 2017
Year
2015
2016
2017
Terajoules
3.43
7.24
4.38
unusual or unexpected climatological conditions. Such
events can also damage or destroy the assets or pro-
duction facilities, and cause personal injury and damag-
es to the environment. Because of this, we have plans in
place to respond to these types of events.
GREENHOUSE GAS EMISSIONS
Infrastructure Division, 2017
(Millions of tons CO2eq)
Direct Emissions6
Indirect Emissions7
1.58
0.0007
Energy efficiency. We report a 3% year-over-year ef-
The Infrastructure Division has continual monitoring sys-
ficiency improvement in producing electrical power, re-
Climate change is a global challenge. Added to this we
tems in place for fixed-source NOx emissions. This sys-
Energy and energy efficiency
flecting the decreased heat rate of our “La Caridad I”
are experiencing intensified weather phenomena, such
tem ensures our emissions fall within the permitted limits.
G4-EN3, G4-EN6
and “La Caridad II” combined cycle power plants. This
as hurricanes, droughts and rains, which generate risks
We reported 1,109 tons of these compounds in 2017.
Energy consumption. During 2017, we consumed
means we have optimized the fuel consumption needed
to our Infrastructure Division operations. The accumula-
27,820 terajoules of fossil fuels and 4 terajoules of elec-
to generate each MWh of electricity.
tion of greenhouse gases (GHG) is triggering transfor-
Mitigation of Greenhouse Gases. We contributed to
tricity. 96% of the energy consumed by the Infrastructure
mations in the weather and in response, we are working
Division is the natural gas needed for our Controladora
Energy generation. During 2017, CIEM reported a
to reduce the emissions from our activities.
de Infraestructura Energética México (CIEM) combined
new record in generating energy from its combined cycle
reducing CO2 emissions thanks to the diversification of
our energy mix. The “El Retiro” wind farm, which started
operations in 2014, has 37 wind turbines and most of
cycle power plants.
power plants, generating 3,630 GWh. This represents a
Given the above, we’re looking at the viability of partic-
the power produced feeds other Grupo México subsid-
FUEL CONSUMPTION
Infrastructure Division, 2015 – 2017
Year
2015
2016
2017
13 4
FUEL CONSUMPTION
Infrastructure Division, 2017
Company
MCC
CIEM
PEMSA
CIBSA
Terajoules
21,681
24,731
27,820
Terajoules
406.35
26,776
624.15
13.49
14% increase over 2016.
ipating in different generation projects using renewable
iaries. In 2017, the wind farm produced 177,473 MWh,
The “El Retiro” wind farm in Juchitan de Zaragoza, Oaxaca,
energies, principally solar and hydroelectric power.
preventing the release of 103,268 tons of CO2eq, equal
to taking 22,113 cars off the road for a year.
reported a lower output this year due to decreased winds
Greenhouse Gas Emissions (GHG). In 2017, the
and the effects of the September earthquakes, which
GHG emissions of the Infrastructure Division totaled
We also have two combined cycle power plants, “La
meant the power could not be discharged for a month,
dropping from 206 GWh in 2016 to 177 GWh in 2017.
1,585,675 tons of CO2eq.
Climate change
G4-EC2, G4-EN15, G4-EN16, G4-EN19, G4-EN21,
G4-EN27
Risks of climate change. The activity of the Infra-
structure Division is subject to different risks, including
6 Direct Emissions: Include emissions from direct energy consumption,
calculated according to the 2017 CRE emission factors and the 2017
CONUEE combustion factors.
7 Indirect Emissions: Include emissions from power consumption, calcu-
lated according to the 2017 Mexican Power Board power consumption
factors (0.582 tons of CO2/MWh), published by the CRE.
Caridad I” and “La Caridad II”, which produced 3,630
GWh to supply power to various Grupo México subsid-
iaries, achieving an emission intensity of 0.4143 tons
of CO2eq per MWh, which is below the National Power
Sector’s Emissions Factor, set by the power regulatory
135
board at 0.582 tons of CO2eq per MWh.
SUSTAINABLE DEVELOPMENT REPORT 2017
Water
G4-EN8, G4-EN9, G4-EN10, G4-EN22, G4-EN26
In 2017, our total water consumption was 4,973,093 m3, 86% of which was from
underground sources. Most of this consumption is used in the operation of the cool-
ing process of our combined cycle power plants.
TOTAL WATER DRAWN
Infrastructure Division, 2017
Source
Underground
Surface (fresh water)
Surface (salt water)
City water supply
Water trucks
TOTAL
WATER CONSUMPTION
Infrastructure Division, 2017
Subsidiary
CIEM
PEMSA
CIBSA
TOTAL
m3
4,255,188
39,753
39,689
26,663
611,800
4,973,093
m3
4,296,755
671,538
4,800
4,973,093
In 2017, water discharges totaled 637,981 m3 for the whole of the Infrastructure
Division. These discharges were handled according to federal regulations.
13 6
Materials
G4-EN1
The many projects of the Infrastructure Division, particularly our well drilling and
construction activities, require materials primarily for the construction and mainte-
nance of work equipment.
INFRASTR UCTURE DIVISIO N / PROTECT
MATERIALS8
División Infraestructura, 2017
Material
Inert rock
Industrial products
Drilling products
Unit
m3
ton
m3
ton
m3
Quantity
8,098,895
174.63
121.03
618.20
30.22
Waste management and spills
G4-EN23, G4-EN24
Waste management. In 2017 we disposed of a total 342 tons of solid hazardous
waste and 454 m3 hazardous liquids, which were managed in strict adherence of
regulations during the phases of handling, storage and sending for recycling or final
disposal. We also produced 6,520 tons of non-hazardous solid waste, some of
which was reused or recycled by third parties.
WASTE
Infrastructure Division, 2017
Material
Hazardous waste
Muds (water treatment plant)
Non-hazardous waste
Waste requiring special
handling
Unit
Solids (ton)
Liquids (m3)
Solids (ton)
Solids (ton)
Solids (ton)
Quantity
342.46
454.05
6,080.99
278.38
161.11
137
Spills. During 2017, an area of 434 m2 was impacted by spills due to accidents
involving highway users. The spill response procedures were activated, taking ap-
propriate actions and cleaning to prevent any environmental impact.
8 “Industrial products” includes maintenance supplies, such as oils, antifreeze, degreasing agents, grease,
paint, solvents, and does not include replacement parts. “Drilling products” include cements, additives and
other chemicals needed for well drilling cementation.
SUSTAINABLE DEVELOPMENT REPORT 2017 Biodiversity
G4-EN11, G4-EN12, G4-EN13, G4-EN14
The operations of the Infrastructure Division are generally situated in areas with little
biodiversity value. In addition to holding all required permits, we ensure our opera-
tions have no impact on the local flora and fauna. Only the administrative offices of
our drilling subsidiary in Ciudad del Carmen are located in a protected area, without
any significant effect due to the type of activity conducted there.
All Infrastructure Division projects adhere to regulations, preparing environmental
impact assessments as necessary. This means conducting a complete analysis
of our planned worksites, and also acknowledging our impacts and identifying the
species with which we share the space, and setting an action plan.
PROTECTED SPECIES
NOM-059-SEMARNAT CLASSIFICATION
Infrastructure Division, 2017
Category
In danger of extinction
Threatened
Subject to special protection
No. of Species
0
5
15
In 2017, we had no project in areas where there are protected species, according to
the International Union for the Conservation of Nature (IUCN) classification.
INFRASTR UCTURE DIVISION / PROTECT
COMPLIANCE
Environmental certifications
During 2017, México Compañía Constructora maintained its ISO 14001 manage-
ment system certification for the eleventh year. The Carmen Sector administrative
offices, cement plant and the Sonora rig, of the subsidiary PEMSA, also maintained
their certification.
PEMSA also has 8 Clean Industry certifications and the “La Caridad” combined
cycle power plant received this certification for the first time. These certifications
are given by the Mexican Environmental Protection Agency (PROFEPA), under this
voluntary program that requires an environmental audit to review the company’s
environmental risk processes and regulatory compliance.
CLEAN INDUSTRY CERTIFICATIONS
Infrastructure Division, 2017
“La Caridad” combined cycle power plant
“Zacatecas” jack-up rig
“Campeche” jack-up rig
“Chihuahua” jack-up rig
“Sonora” jack-up rig
“Tabasco” jack-up rig
“Veracruz” jack-up rig
Cement plant
Carmen Sector offices
13 8
139
Fines and sanctions
G4-EN29
No Infrastructure Division subsidiary received any significant fine or sanction from
the environmental authorities in 2017.
SUSTAINABLE DEVELOPMENT REPORT 2017 INDEPENDENT ASSURANCE REPORT
INDEPENDENT ASSURANCE RE PORT
CARTA DE
VE R IFICACIÓN
14 0
141
SUSTAINABLE DEVELOPMENT REPORT 2017CARTA DE VERIFICACIÓN INDEPENDENT ASSURANCE REPORT
INDEPENDENT ASSURANCE RE PORT
INDEPENDENT ASSURANCE REPORT
14 2
143
SUSTAINABLE DEVELOPMENT REPORT 2017 GRI CONTENT INDEX
G4-32
General Standard Disclosures
Indicator
Description
Pages
Independent
verification
Strategy & Analysis
G4-1
G4-2
Organizational Profile
G4-3
G4-4
G4-5
G4-6
Letter from the President
Description of the key elements, risks and opportunities
Name of the organization
Primary brands, products and services
Location of the organization’s headquarters
Countries where the organization operates
G4-7
G4-8
G4-9
G4-10
G4-11
G4-12
G4-13
G4-14
Nature of the ownership and legal status
Markets served
Size/Scale of the organization
Workforce
Employees covered by collective bargaining agreements
Supply chain
Significant changes in the organization
Precautionary principle
14 4
G4-15
G4-16
Material aspects & coverage
G4-17
G4-18
G4-19
G4-20
G4-21
G4-22
G4-23
Social, environmental and economic programs and initiatives
Association memberships
Organizational structure
Definition of content
Material aspects Inside back cover
Coverage of each material aspect within the organization
Limits on each material aspect outside the organization
Consequences of the restatement of information from
previous reports
Significant changes in the scope and coverage of each material
aspect in terms of previous reports
Participation of Stakeholders
G4-24
G4-25
List of the organization’s stakeholders
Procedure for identifying stakeholders
•
•
4
4
9
9, 49, 88, 119
9 back cover
9, 10, 11, 12, 13, 14,
15
9, 49, 88, 119
9, 49, 88, 119
49, 56, 90, 94, 119,
123
56, 94, 123
57, 94, 123
31
49, 87, 121
We cover the pre-
cautionary principle
by complying with all
applicable legislation
30
30
Inside back cover
Inside back cover
Inside back cover
Inside back cover
Inside back cover
Inside front and
back cover
Inside back cover
27, 28, 29
27, 28, 29
GRI CONTENT INDEX
27, 28, 29
27, 28, 29
Inside front cover
Inside front cover
Inside front cover
Inside front cover
Inside front cover
Inside front cover
18, 20
145
G4-26
G4-27
Report Profile
G4-28
G4-29
G4-30
G4-31
G4-32
G4-33
Corporate Governance
G4-34
G4-35
Communication with stakeholders
Key issues for stakeholders
Reporting period
Date of the last report
Reporting cycle
Point of contact for questions regarding the report or its content
Location of the basic content of the report
Independent assurance
20
20
20
20
Governance structure of the organization
Process by which the highest governance body delegates
its authority to senior management and certain employees
for economic, environmental and social issues
Executive-level positions for economic, environmental and so-
cial matters, and whether position holders report directly to the
highest governance body
Consulting processes between stakeholders and the highest go-
vernance body on economic, environmental and social matters
Composition of the highest governance body and its committees 20
20
Reference whether the person that presides over the highest
governance body is also an executive officer
Processes and criteria for nominating and selecting the highest
governance body and its committees
Processes by which the highest governance body avoids and
manages conflicts of interest; reference to whether conflicts of
interest are disclosed to stakeholders
Roles of the highest governance body and senior management
in the development, approval and updating of the organization’s
mission statements, values, strategies, policies and goals
Measures to develop or improve the collective knowledge of
the highest governance body on economic, environmental
or social matters
20
20
22
G4-36
G4-37
G4-38
G4-39
G4-40
G4-41
G4-42
G4-43
SUSTAINABLE DEVELOPMENT REPORT 2017 G4-44
G4-45
G4-46
G4-47
G4-49
G4-50
G4-51
G4-52
G4-53
Performance review process for the highest governance body
with regard to the governance of economic, environmental and
social issues, and measures adopted based on results
Role of the highest governance body in the identification and
management of economic, environmental and social risks and
opportunities; reference whether stakeholders are consulted
Role of the highest governance body in reviewing the
effectiveness of the organization’s risk management processes
for economic, environmental and social matters
Frequency of the highest governance body’s review of
the economic, environmental and social impacts, risks
and opportunities
Process for communicating critical concerns to the highest
governance body and senior management
Nature and number of critical concerns that were communica-
ted to the highest governance body, and mechanisms used to
address and resolve them
Remuneration policies for the highest governance body
and senior management
Processes for determining remuneration
Reference to the consideration of the opinion of stakeholders
regarding remuneration
20
20
20
20
20
20
20
20
20
Ethics & Integrity
G4-56
G4-57
G4-58
14 6
Values, principles, standards and norms of the organization
Internal and external mechanisms for seeking advice
on ethical and lawful behavior, and matters related to
organizational integrity
Internal and external mechanisms for reporting concerns
about unethical or unlawful behavior and matters related to
organizational integrity
18, 22
22
22
•
GRI CONTENT INDEX
Independent
verification
•
•
•
•
147
Material
Aspect
DMA /
Indicators
Water
DMA
G4-EN8
G4-EN9
G4-EN10
DMA
G4-EN11
G4-EN12
Biodiversity
& the
environment
G4-EN13
G4-EN14
MM1
MM2
DMA
G4-LA9
G4-LA10
G4-LA11
Training
& career
development
Specific Standard Disclosures
Description
Management approach
Total water consumption by source
Water sources significantly affected by
drawing water
Percentage and total volume of water recycled
and reused
Management approach
Operational sites owned, leased, managed,
adjacent to, covering or located in or outside
protected areas of high biodiversity
Description of the most significant impacts
of activities, products and services on
biodiversity in protected areas and areas of
high biodiversity value outside protected areas
Protected or restored habitats
Number of IUCN Red List species and
national conservation list species with habitats
in areas affected by operations,
by level of extinction risk
Size of land (owned or leased and managed
for production or extraction activities) affected
or restored
Biodiversity management plans
Management approach
Average hours of training per year per
employee by gender and employee category
Skills management and ongoing training pro-
grams that support the employability of emplo-
yees and assist them in managing
their career ending
Percentage of employees receiving regular
performance and career development reviews,
by gender and employee category
Pages
76, 116, 136
76, 116, 136
76, 116, 136
76, 116, 136
83, 117, 138
83, 117, 138
83, 117, 138
83, 117, 138
83
83
62, 98, 126
62, 98, 126
62, 98, 126
64, 99, 127
SUSTAINABLE DEVELOPMENT REPORT 2017 DMA
G4-EC5
G4-LA1
G4-LA2
G4-LA4
G4-LA12
Commitment
& workplace
climate
G4-LA13
G4-HR3
G4-HR4
MM4
Management approach
Ratio between the basic wage, by gender, and
the local minimum wage where there are sig-
nificant operations
Total number of new hires and employee tur-
nover by age group, gender and region
Benefits provided to full-time employees that
are not provided to temporary or part-time em-
ployees, by significant locations of operation
Minimum notice periods for operational chan-
ges and possible inclusion of these in collecti-
ve bargaining agreements
Composition of governance bodies and break-
down of employees by employee category,
gender, age group, minority group members-
hip and other indicators of diversity
Ratio of basic salary of women to men, by ca-
tegory and significant locations of operation
Number of incidents of discrimination and co-
rrective actions taken
Operations and suppliers identified in which
the right to exercise freedom of association
and collective bargaining may be violated or
threatened, and measures taken to support
these rights
Number of strikes and closures lasting over
one week, by country
•
•
56, 94, 123
59, 96, 124
59, 97, 125
61, 98, 126
57, 94, 123
58, 95, 123
59, 96, 124
58, 95, 123
23
No strikes in 2017
•
GRI CONTENT INDEX
•
DMA
G4-HR1
G4-HR2
G4-HR5
Human
rights
G4-HR6
G4-HR7
G4-HR8
G4-HR9
MM5
DMA
G4-EC1
G4-EN31
Economic
performance
Management approach
Number and percentage of significant invest-
ment agreements and contracts that include
human rights clauses or that have undergone
human rights screening
Employee training hours on policies and proce-
dures on aspects of human rights that are re-
levant to operations, including the percentage
of employees trained
Operations and suppliers identified as having
significant risk for incidents of child labor, and
measures taken to contribute to the effective
abolition of child labor
Operations and suppliers at significant risk of
incidents of forced labor, and measures taken
to contribute to the elimination of all forms of
forced labor
Percentage of security personnel trained in the
organization’s human rights policies or proce-
dures that are relevant to operations
Number of incidents of violations involving ri-
ghts of indigenous peoples and actions taken
Number and percentage of operations that
have undergone human rights screening
Total operations located at or near indigenous
communities
Management approach
Direct economic
distributed
Details of environmental expenditures and
investments
value generated and
56, 94, 123
23
23
23
23
23
23
23
23
31
31
31, 77
14 8
149
SUSTAINABLE DEVELOPMENT REPORT 2017 DMA
G4-EN22
G4-EN23
G4-EN24
G4-EN25
G4-EN26
MM3
DMA
G4-EN15
G4-EN16
G4-EN19
G4-EN21
DMA
G4-SO3
Effluents
& waste
Emissions
Ethics &
integrity
G4-SO4
G4-SO5
DMA
G4-EN33
15 0
Management
of the
supply chain
Management approach
Total water discharged by quality and
destination
Total weight of waste by type and treatment
method
Total number and volume of significant spills
Weight of transported, imported, exported or
treated waste considered hazardous under the
Basel 2 Convention Annexes I, II, III and VIII, and
percentage of waste shipped internationally
Identity, size, protected status and biodiversi-
ty value of water bodies and related habitats
significantly affected by the organization’s dis-
charges of water and runoff
Total overburden, rocks, tailings and muds that
present a potential risk
Management approach
Direct greenhouse gas emissions (Scope 1)
Indirect greenhouse gas emissions (Scope 2)
Reduction of greenhouse gas emissions
NOx, SOx and other significant air emissions
Management approach
Number and percentage of operations asses-
sed for risks related to corruption and signifi-
cant risks identified
Communication and training on anti-corruption
policies and procedures
Confirmed incidents of corruption and actions
taken
Management approach
Significant actual and potential negative en-
vironmental impacts in the supply chain and
actions taken
82, 114, 137
77, 136
82, 114, 137
82, 114, 137
82, 114, 137
77, 116, 136
82
79, 112, 134
79, 112, 134
79, 112, 134
79, 112, 134
134
22
22
22
22
31
31
•
•
•
•
•
•
•
•
DMA
G4-EC2
Risk
management
& legal
G4-EN29
compliance
DMA
G4-LA12
Corporate
governance
Innovation,
continuity
and
operational
efficiency
DMA
G4-EN1
G4-EN2
G4-EN3
G4-EN6
G4-EN27
86, 117, 139
79, 112, 134
86, 117, 139
Management approach
Financial implications and other risks and
opportunities for the organization’s activities
due to climate change
Monetary value of significant fines and to-
tal number of non-monetary sanctions for
non-compliance with environmental laws and
regulations
Management approach
Composition of governing bodies and break-
down of employees by employee category,
gender, age group, minority group and other
indicators of diversity
Management approach
Materials used by weight or volume
Percentage of materials used that are recycled 81, 114
Internal energy consumption
Reduction of energy consumption
Mitigation of the environmental impact of pro-
ducts and services
76, 109, 132
81, 114, 136
78, 111, 134
78, 111, 134
121, 134
20
20, 58, 95, 123
GRI CONTENT INDEX
•
•
151
SUSTAINABLE DEVELOPMENT REPORT 2017 DMA
G4-EC7
G4-EC8
G4-SO1
G4-SO2
G4-SO11
MM6
MM7
MM8
MM10
CRE7
DMA
G4-PR5
DMA
G4-LA5
G4-LA6
G4-LA7
G4-LA8
CRE6
Management approach
Development and impact of infrastructure in-
vestments and services supported
Significant indirect economic impacts and their
scope
Percentage of operations with implemented
development programs, impact assessments
and community engagement
Operations with significant actual and potential
negative impacts on local communities
Número de reclamaciones sobre impactos
sociales que se han presentado, abordado y
resuelto mediantes mecanismos formales de
reclamación.
Number and description of significant dispu-
tes over the use of lands, and local community
and indigenous community rights
Use of grievance mechanisms to resolve
disputes
Number (and percentage) of sites where the
organization operates artisanal and small-sca-
le mining
Number and percentage of operations with
mine closure plans
Number of people voluntarily and involuntarily
displaced and/or relocated due to the develop-
ment and end result of works, by project
Management approach
Results of surveys measuring customer
satisfaction
Management approach
Percentage of employees represented in for-
mal joint management-worker health and sa-
fety committees, established to help monitor
and advise on occupational health and safety
programs
Type and rates of injury, occupational diseases,
days lost and absenteeism, and total number
of work-related fatalities, by region and gender
Workers with high incidence or risk of occupa-
tional diseases
Health and safety topics covered in formal
agreements with unions
Percentage of the company that operates un-
der certified health and safety management
systems, developed according to internationa-
lly recognized standards
70, 104
52, 71, 91, 121
52, 71, 91
70, 71, 104, 130
70, 104, 130
75
23
23
23
85
130
55, 93, 122
55, 93, 122
65, 99, 128
65, 99, 128
65, 99, 128
65, 102, 130
57, 94, 123
65
•
•
•
•
•
•
•
•
•
Community
relations
Customer
relations
1 5 2
Occupational
health &
safety