Forging is a manufacturing process involving the shaping of metal using localized compressive forces. It is necessary to apply a lubricant, in many cases composed by graphite, and the process generate a wastewater that requires a proper treatment. The objective of this study was to evaluate the efficiency of the treatment of such effluent and characterize the sludge generated at a forging industry that recently changed in industrial process the oil-based lubricant by water-based lubricants. Initially, wastewater was treated by coagulation/flocculation with poly-aluminum chloride and a cationic flocculant. The treatment substantially reduced the pollutants load, exceeding in 90% the efficiency for most parameters assessed. The sludge generated in the wastewater treatment plant was characterized in terms of its microstructure, particle size distribution, chemical and mineralogical composition, and immediate analysis in terms of a solid energetic material. The sludge is composed mainly by graphite particles and, after dehydration, resulted in a material with possibilities for safe discharge, recycling or reuse. Considering the amount of sludge generated and the regional context, one possibility for destination is as energetic material for electric power generation.