Wallarah 2 has rejected the Darkinjung Local Land Council's opposition to the Wallarah 2 coal mine as a 'cash grab'.
It came after the local Land Council revealed it was aiming to seek an injunction against the mine.
Earlier this week the Darkinjung Land Council slammed the mine's application as 'invalid', according to the ABC.
Sean Gordon, the group's CEO, said the miner's proposed rail spur runs over native land, and refused to give permission to its operation.
"I think it is quite risky for minister Hazzard to be continuing with this project knowing that it is operating without any jurisdiction over our land," he told the ABC.
The land in question measures around 1750 metres by 40 metres
The group has gone on to demand $300 million in compensation for access, or approximately$2/tonne for the life of the mine.
Wallarah 2 has slammed the recent move, stating that it has "had ongoing discussions with Darkinjung for many years regarding compensation for accessing Darkinjung land to build a rail spur connecting the existing railway line in order to transport coal to the port of Newcastle".
"Wallarah 2 has offered Darkinjung a generous compensation package, including cash compensation, support for a proposed training centre, apprenticeships for local Aboriginals and tertiary scholarships over the life of the proposed mine," it said in a company statement.
It went on to say the new $300 million claim for the land "equates to $30 million per hectare, or $170 000 in land access fees for every lineal metre of railway track built across Darkinjung land".
"This demand amounts to extortion."
It also claimed Darkinjung CEO Sean Gordon's statements on the ABC that Wallarah 2's 2010 project application did not include Darkinjung land were false.
Gordon says the Land Council will continue to challenge the mine's development.
"It's a real tester that a small aboriginal community of an Aboriginal Land Council are really taking on the Korean Government around protecting our rights and our interests," Gordon said.
These latest developments come as the Greens criticise Labor's push to ban the mine, which in turn may damage moves to ban mining right across the Central Coast.