The Environment Protection Agency and Wodonga Council are investigating stockpiles and noise complaints at Killara's Immix Metal Recycling Plant.
EPA Regional Manager for the North East Renee Palmer said the agency received reports of alleged illegal dumping at a premises on the site of the former Wodonga saleyards, on Whytes Road, Bandiana, in February.
"EPA officers inspected the site and found waste stockpiles that breached the requirements of the Victorian Management and storage of Combustible Recyclable Waste Materials guideline, with materials stacked too high and with inadequate separation distances between stockpiles," she said.
Ms Palmer said Immix had been issued with a Pollution Abatement Notice which required stockpiles to be brought into compliance.
"EPA is currently assessing compliance against this notice," she said.
"EPA has also conducted noise monitoring in the nearby residential area of Killara and is assessing whether noise from the site is compliant with regulations."
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Wodonga chief executive Mark Dixon said work at Immix had been delayed while the company waiting for a piece of machinery from Germany.
"Inevitably [there was] a big backlog and we want to help manage that backlog back down to reasonable levels which in turn will make that organisation compliant," he said.
Mr Dixon said council was aware Immix was in breach and were working with the company.
"Immix is processing 150 tonnes of material a day in order to address stockpiling issues caused by a delay in the arrival of machinery," Mr Dixon said.
"They are presently receiving 80 tonnes of material a day and additional machinery will be in place from December to March to assist with the clearing of the backlog." Immix declined to comment.