A lithium-fuelled fire has erupted at a Perth recycling plant, sending toxic smoke across the city's south-eastern suburbs for hours.

Batteries inside the Maddington workshop fuelled the flames as the co-owner was rushed to hospital and residents were warned to stay indoors. 

Flames filled workshops at Li-ion Energy as thick toxic smoke spiralled into the air about 1.30pm today, prompting a hazmat warning for parts of Perth.

"We had a bunch of lithium batteries ready for export, we don't think the fire was caused by the batteries," founder Justin Manton said.

"It was something that set fire to the crates around the batteries, it just spread really fast."

The owners were inside when the blaze ignited in one of the neighbouring workspaces.

"[It's] well over $7 million in lost goods, and then there's a building," Manton said.

Burwash Place in Maddington was closed as fire crews got to work.

"We know we're dealing with approximately 80 tonnes of solid-state batteries," Department of Fire and Emergency Services WA Superintendent Leigh Bishop said.

Just last year the owners spoke to 9News warning about the dangers of battery fires, never imagining they'd be dealing with one themselves on this devastating scale.

"Yeah it's pretty shocking, one of the things we just try to avoid the most is fires and to have it happen here is disappointing, and a bit tragic," Manton said.

Late this afternoon crews appeared to get the upper hand but were set to remain on scene into the night. 

The collapsed roof and walls of a workshop, along with twisted and smoking metal were signs of the damage.

"It'll be a hard one, it'll be pretty hard to overcome this," Manton said.

Nearby residents were told to stay inside because of the hazardous smoke.

The exact cause of the fire is yet to be determined.

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The manhunt for a convicted gang rapist who allegedly escaped immigration detention is over.

Michael Angok was arrested at Seven Hills in Sydney's west this afternoon.

He had 100 hours of freedom before being arrested about a 40-minute drive from where he escaped in Bankstown.

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He's spent the last nine years in Villawood Detention Centre, but on Wednesday morning allegedly escaped from Bankstown Hospital while receiving treatment.

The 30-year-old was jailed for the gang rape of a 14 year-old-girl in Doonside in 2014.

He was awaiting deportation.

Police arrested the man and took him to Blacktown police station, where he was charged on the outstanding warrant.

He was refused bail to appear in Blacktown Local Court tomorrow.

Investigations are continuing.

Gale-force winds and large coastal swells are set to continue.