My mother bought bags of Earthgro wood chip mulch dyed brown and red at Home Depot and spread it on top of the soil surrounding her plants a couple years ago. I noticed the plants growth have remain stunted, so I went online to read about this mulch. There are some people saying these wood chips are sourced from recycled wood and may contain toxic chemicals.
I raked up the mulch and didn't find much life underneath it either (except for some spiders). I'm going to replace the area with compost. But now I have no clue what to do with this ugly mulch. I'd like to compost it, but hesitate due to the possible toxicity in the wood. Wouldn't that deter beneficial organisms from breaking it down? And even if it broke down, I'd be spreading that compost back in the garden, re-introducing the toxic chemicals... right? Is my only safe option to throw it away in the recycling bin and have it be someone else's problem? Then I'd feel guilty. Ahh!
Dyed wood chip mulch can be remediated and then composted as long as you use fungal slurries to remediate the toxins prior to composting.
The preferred mushrooms for slurries in this instance would be Oyster and King Stroph. These will break down not only the dyes but also any "treated" wood that might be in the blend.
Of course dyed wood chips can be composted. Otherwise, the world would be filled with dyed wood chips. But it isn't. :)
Rake the chips into a pile and water it. Add a source of nitrogen to accelerate the process. I just started using one of these cheap totes as a composter with some very woody waste. http://blogsnewsreviews.com/tough-poly-bag-composts-tons/