A secret deal struck by the Victorian government will alleviate the environmental fallout after a recycling giant told about 30 councils it would stop accepting material.
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Less than a day after SKM's announcement which will force the waste into landfill, Environment Minister Lily D'Ambrosio announced a partial solution.
"We will be able to see a diversion of material from SKM that will be able to go to other recyclers," she told reporters on Friday.
The minister refused to identify the alternative operators or reveal how much the deal was costing, but said up to 40 per cent of the SKM materials destined for landfill would instead be processed by other recyclers.
"We are not about putting dollar figures on these things. Ultimately people want to see results."
Ms D'Ambrosio labelled SKM a "rogue, cowboy operator" as she admitted the majority of recyclables once processed by the company will have to go to landfill until a long-term solution was found.
It is unclear if SKM would return to full operations.
Founder Giuseppe Italiano had already flagged his business would shut this week.
The firm has had a series of fires at its Melbourne sites, leading to a crackdown by the Environmental Protection Authority for licence breaches, including stockpiling material.
"They can't in fact take any more without breaching their permits with EPA. The system is fully loaded," SKM's representative Rob Spence told ABC radio on Friday.
"If this stuff goes to landfill, I have done a quick number and it says the cost to councils will be in aggregate about $700,000 a week."
The EPA said there are no restrictions on SKM taking waste at its Coolaroo, Laverton North, Geelong and Hallam sites, but its subsidiary Glass Recovery Services isn't allowed to take waste until its stockpiles comply with the law.
That doesn't help SKM because the glass waste arrives mingled with other types of waste.
Mr Spence said the EPA put a freeze on processing glass at the Coolaroo site and restricted glass going into the facility in May, causing a backlog and increasing stockpiles.
The EPA pointed out there were two fires earlier this year at the Glass Recovery Services stockpile, leading to the ban.
SKM has faced court in Victoria and Queensland this week when creditors owed millions of dollars sought that the business be wound up.
Mr Spence said if SKM closed then 600 workers will lose their jobs, after the firm spent $50 million in the past two years on new equipment.
Victorian Premier Daniel Andrews made no apologies for the environmental watchdog's crackdown on SKM.
"Their version of events is it seems to be everybody else's fault," he told reporters.
Australian Associated Press
