For anyone looking at that picture wondering what on earth is going on...
Find the green excavator. It's just above and to the right of the two 455s. The large brown structure to its left is the feed conveyor. There's a conveyor belt in the middle. An entire train carriage can't be fed into the shredder in one go - it first needs to be removed from its bogies, then cut into smaller pieces, usually around the size of a vehicle (car/van), or smaller. If it's very thin then a larger piece could be fed in; for example, the roof of a carriage. Whatever a grab mounted on the excavator can pull off in one go is what goes on the belt. If you look next to the 317 on its side, there's an orange excavator with a cutting shear on its arm. This will be used to cut the carriages into smaller pieces - on the other side of the 317 are pieces of other carriages, waiting to be fed into the shredder.
Once on the belt, it is taken upwards. The small blue hut part way up is where the controller sits, keeping an eye on things through visual inspections (CCTV and out of the window), and from what various computer screens will tell them. Most of the shredder is automated but a human eye is still necessary. The feed belt goes up past the hut, into the large blue structure, where the belt levels out momentarily, before ending. Where it ends, the metal scrap is dropped down into the feed roller, which pulls the scrap into the shredder box. The feed roller is controlled in both speed and the pressure it can exert - it is there to both pull scrap in but also to roll it as flat as much as possible at the same time. A road car (or van!) can be flattened down to just a few inches by the roller. The forces involved here are significant.
On the other side of the roller, in the smaller triangular shaped structure is the hammer mill - a very large shaft approximately three metres or so wide, with a frame that allows a couple of dozen free spinning hammers to mount onto it on their own shafts. These hammers swing out using centrifugal force created by the main shaft spinning. They will obliterate a typical car or van in just a few seconds. The roller keeps feeding in the scrap as fast as the hammers can shred it. I would estimate it would take less than a minute to shred an entire, complete 455 carriage (minus its bogies - there are things that are too strong for the hammers).
Below the shredder box is another conveyor belt - this is the smaller brown one. It leads to the processing part of the mill. Here, the output from the shredder is separated into three fractions - ferrous, non-ferrous, and "fluff", otherwise known as shredder residue. Ferrous and non-ferrous are self explanatory. "Fluff" consists of everything that isn't metal. Seats, insulation, paper/cardboard advertisements, carpet, plastic moldings, rubber, etc. Depending on the configuration of the plant (I don't know Sims' exact setup at Newport), it's usually a combination of magnets, eddy currents, air separation, manual picking lines. There are many other techniques and processes for separating out the fluff, but usually this is outsourced. Sims certain has the capacity to further separate it, but I don't *think* they do it at the Newport plant.
In theory the hammers can shred engine blocks - small ones pose no problem. Whether they'd be able to shred an HST's engine and motor... probably, but not in one piece, and it wouldn't be the most efficient way anyway. Generally UK scrap yards remove engines and gearboxes before crushing a car, but not all do, and plants like this can take cars regardless of whether they have engine and gearbox. But those are small engines. I would think that a big engine like an MTU or Valenta would be sent off for more specialist recycling as it would be more efficient and would reduce the rate at which the hammers were worn down. There are slow speed shredders that have immense amounts of torque and with solid, fixed cutting teeth (instead of swinging hammers) designed to tear apart an engine without anywhere near the amount of wear the same engine would inflict on a hammer mill.
Anyway, hope that's an interesting, if somewhat depressing explanation of what happens to our old trains at the end of their lives. Large scale and chillingly efficient. A bit different to the days when Booths etc would cut them up with gas torches and disc cutters.
For the morbidly curious, here's a NI class 450 (thumper) being cut in half by a cutting shear similar to the one in the picture.
Here's a Sims plant with a hammer mill operating in New Zealand:
Here's a "documentary" on the hammer mill at Newport; it's a bit sensationalised but you can mostly ignore that! It also shows some of the other operations that go on at Sims.