Three Sydney contractors have been charged over the alleged theft and unlawful sale of over 300 tonnes of copper wiring potentially worth up to $3.5 million.

The arrests come after an investigation sparked by industry reports of contractors removing copper wiring and selling it to scrap metal collectors for a profit while purporting to run a legitimate business.

In March this year police attached to the financial crimes squad motor unit searched a scrap yard in Ingleburn and seized approximately $200,000 worth of stolen copper wiring.

Later that day, authorities executed a search warrant on a property in Campbelltown, where they found an additional $105,000 worth of cabling and subsequently arrested and charged two men with larceny.

After further investigation police alleged the two men, aged 43 and 48, had stolen approximately 282 tonnes of copper wiring, which now holds a potential resale value of about $2.1 million.

Last Thursday a man in his 30s was arrested at Fairfield Police Station and charged with three counts of larceny and knowingly dealing with crime, with police alleging he stole 68 tonnes of copper with a value of $1.4 million.

He was denied bail and faced Fairfield Local Court last Friday.

Police will allege in court that since February this year the three men stole copper cabling with a potential value of up to $3.5 million.

The appeal of copper is due to its high re-sale value, with a single kilogram of material able to fetch up to $10, making it one of the most sought-after scrap metals available.

Detective Superintendent Gordon Arbinja told ABC Radio Sydney it was alleged the contractors were working on job sites in south-west Sydney and removed "obsolete" ADSL cabling which was to be replaced with new NBN lines.

Detective Superintendent Arbinja said the plan for the cabling was for it to be sold through formal channels to contracted merchants.

Instead, police allege the cabling was illegally taken to "corrupt" merchants for substantially less than what it was worth, and the profits were kept by the charged men.

The theft comes after a recent string of copper robberies, with Ausgrid recording 74 separate incidents across the network in the last nine months, including a hotspot of activity in the state's Hunter Region mid-last year which saw six attempted thefts in the space of a month.

Despite the high demand for copper, Detective Superintendent Arbinja warned unlawful sellers that they are cracking down on copper theft.

"It's inevitable anyone responsible will be caught and put before the courts – and that includes the scrap metal merchants," he said.

Police also warned that copper theft can be dangerous.

Safe Work Australia classifies the substance as hazardous, saying exposure in high levels can pose a risk to the liver and kidneys.