It is estimated the sludge, also known as biosolids, will save approximately 800 tonnes of waste every year from ending up as landfill.

Altogether currently owns and operates seven local water centres - including the world's largest in-basement residential water centre at Central Park in Sydney.

It has also been looking for ways to use the waste that it collects from its unique recycled water communities at Huntlee and Cooranbong, where it services around 1000 customers.

"By capturing valuable organics, nitrogen and phosphorous from waste and turning it into [a product called] Biomix, we can create nutrient-rich topsoil that will encourage plant growth at former mine sites and help bolster productivity of agricultural lands," Altogether's executive manager of sustainable utility services Darren Wharton said.

"We're committed to the creation of a circular economy through the recovery and reuse of local resources.

Veolia collects the waste from the Altogether recycled water communities and delivers it to Loop Organics' facility at Ravensworth.

The facility makes specialised soil amendment products to be used in agriculture, mine rehabilitation and composting.

It is able to process approximately 55,000 tonnes of garden organics and biosolids each year.

"We want to move beyond the linear approach to economy, where you take raw material, turn it into something that is used and then thrown away," Mr Wharton said.

"Instead, we want to create a circular economy in the locations where we operate-one that delivers positive benefits to people in our communities and the environment and that also makes use of the products that would otherwise turn into landfill."

Hunter Water is also actively recycling Biosolids.

Of the 6000 tonnes of biosolids produced at Hunter Water treatment plants each year, about 70 per cent is used as a soil conditioner for agricultural pasture improvement, and 30 per cent for mine site rehabilitation.

"By using different technologies we could generate renewable energy from biosolids to reduce greenhouse gas emissions, before using the final biosolids product as a soil conditioner. We are investigating a range of options to help us get more benefits from reusing biosolids," a spokesman said.

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