The head of Hunter Resource Recovery says it is "business as usual" for Lower Hunter recycling pick-ups as it works to reopen the region's processing plant at Gateshead.
The Newcastle Herald reported on Wednesday that most of the Lower Hunter's domestic recycling was being trucked to Sydney for sorting after the Gateshead plant closed in late January.
HRR is a consortium formed by Lake Macquarie, Maitland, Cessnock and Singleton councils to handle kerbside recycling for 142,000 homes.
The company has a contract with Solo Resource Recovery, which collects recycling and, until late January, trucked it to the Gateshead materials recovery facility (MRF) for processing.
In a complicated business arrangement, Solo subcontracts the sorting to recycling giant Polytrade, which in turn subcontracts the work to a company called Materials Recovery Management, which is owned by Central Coast recycler iQ Renew.
It is understood Materials Recovery Management, which owns the processing equipment, has terminated its contract with Polytrade over the Gateshead "gate" fee, which is the amount per tonne MRF operators charge for trucks to enter their plants.
Gate fees have become a crucial component in the recycling chain as processors struggle to find a viable market for their recyclable materials.
In a separate, historical dispute, Materials Recovery Management is taking Polytrade to the Supreme Court in a matter listed for a directions hearing on February 21.
City of Newcastle also has a kerbside recycling contract with Solo, which is now taking Newcastle and Hunter Resource Recovery recycling to Polytrade's Rydalmere MRF in western Sydney for processing.
The Newcastle Herald attempted to contact Solo, Materials Recovery Management and Polytrade for comment.
HRR chief executive officer Roger Lewis said on Wednesday that the Gateshead plant's closure had no impact on recycling services or costs in Lake Macquarie, Maitland, Singleton and Cessnock.
"We want to assure our residents it's business as usual," he said.
"We're not involved in the Supreme Court action, nor is Solo Resource Recovery. The Supreme Court action's got nothing to do with the closure of the site.
"It's a historical issue that goes back two and a half years through other relationships between iQ Renew and Polytrade."
Mr Lewis said HRR no longer had access to the Gateshead plant but "it's our intention to re-establish that facility, albeit under a different sorting agent, as soon as it's practical".
He said Solo and Polytrade were keen to re-establish a Hunter sorting facility.
"In the interim product is going to Sydney ... our aim is to ensure we produce the best possible product we can in order for it to meet the market standard," he said.
"If that's done at no additional cost to the residents, and service is uninterrupted, then there's no issue.
"All we're concerned about is making sure the bins get picked up, the product gets sorted and it gets distributed ethically."
The Hunter's recycling is sent by truck to Sydney or Melbourne for secondary sorting and distribution regardless of whether the Gateshead plant is operating, but Mr Lewis said HRR was keen to revive the plant to support local employment.
City of Newcastle has responded differently to the disruption in the industry and the Gateshead plant's closure.
Councillors voted unanimously on Tuesday night to adopt a staff recommendation to vary the Solo contract so the processing part of the deal is carried out by iQ Renew on the Central Coast.
The council will enter into a one-year contract with iQ Renew while it works on a long-term strategy which could include establishing a MRF at its Summerhill tip.
The council said in a statement that the new arrangements were in response to uncertainty over Polytrade's ability to process recyclables locally and how much processing would cost.
"By signing a new processing contract, City of Newcastle and its residents finally have certainty that local recycled waste will continue to be collected without disruption and, most importantly, processed rather than sent to landfill," council waste manager Troy Uren said.
The changes will not affect bin collection times, but they will add an estimated $2 million to Newcastle's annual recycling costs, which equates to about an extra $20 a year per household.
Councillors asked for a report on whether to call for tenders to establish and operate a MRF at Summerhill.
The MRF could process recyclable materials for other Hunter councils, including Port Stephens, which sends its recycling to iQ Renew.
The Newcastle Heraldreported in December that Newcastle council chief executive officer Jeremy Bath had rejected Solo's request for a $3 million annual variation in their five-year contract .
Polytrade told the industry early last year that the Gateshead plant was operating on a week-by-week basis after China slapped a ban on importing many recyclables.
Industry sources have told the Newcastle Herald that, in addition to the China ban, recyclers have not enjoyed the windfall they were expecting from the state's container deposit scheme because households have been sorting out eligible cans and bottles.
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