The company is the second largest recycler of contents from yellow-topped bins in Sydney after Australian waste giant Visy. Polytrade has been operating the Rydalmere plant since 2013, handling tens of thousands of tonnes of kerbside recyclables a year.

Lithgow City Council said they have had offers from other processing companies, including one they will be recommending at the next council meeting on Monday, February 24.

"For the moment recycling will continue with the current processor as it always has until that contract ends," a council representative said.

Subject to council approval, they will then go ahead with a new processor late in March.

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According to council everyone in the Lithgow Government Area who has a curb side yellow bin will soon have their recycling taken by the same trucks but to a different processor in Sydney.

"We are at mercy of what happens with cost of the recycling companies but at this stage there is no plan to change the price of rates," they said.

At the current time council is looking at setting fees and charges which will then go out for community consultation.

"If you have heard on the news that other councils will be raising their rates, that hasn't happened here, nothing has changed," they said.

"But that is subject to change as we are at the mercy of the processors as well as state and federal government."

Council said it was "business as usual" for residents.

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"It is just a simple change which will see the same trucks that pick up the recycling go from delivering to one company, to another," they said.

Fairfield, the Inner West and Willoughby were also affected by the the sudden closure which comes three years after the plant received a $5 million grant from the NSW government to help pay for installing equipment that processes mixed plastics. Polytrade also received another $5 million in 2017 for a glass facility in Sydney.

In 2018 it was speculated that Lithgow ratepayers were going to see an increase in rubbish disposal fees in part to China's clampdown on imported recyclable waste.

Polytrade, at the time applied a $150 gate fee in response to the collapse in demand for recyclables internationally.

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A $15 rebate was also removed, meaning council was up for an extra $165 per tonne of recyclable waste delivered to the Sydney company by council's waste collection contractor JR Richards.

Lithgow Council voted to incur the extra costs rather than send the LGA's recyclable waste to landfill, which a report from council outlined as the only alternative option.

The additional fees, applied by Polytrade from April 1, 2018 were estimated to cost council $58,163 that financial year and $232,650 in the next financial year.

"This is a national and international issue not just an issue for Lithgow City Council, or any local government body for that matter," councillor Wayne McAndrew said.

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