The NSW Government's strategic land use policy could cost millions of dollars and thousands of jobs, according to research released by the NSW Minerals Council.
In a statement yesterday the NSWMC said a study by PricewaterhouseCoopers and Monash University showed the policy could hinder the development of the mining industry.
It said if the strategy went ahead NSW could lose an average $1 billion a year in royalties over the next twenty years.
It also said the policy would also result in 8,000 less jobs and cut one per cent from forecast economic growth in 2018.
Council CEO Stephen Galilee said the mining industry was the biggest export industry in NSW and hampering its expansion would cost the state economy.
"Losing a billion dollars a year is a big budget cost that will hit hard," he said.
"It's funding that could be spent on better infrastructure and services for the community."
The strategic regional land use policy has also drawn criticism from the agriculture sector, which says the plan fails to protect farmers from the mining industry.
NSW Farmers, GetUp, the Greens, and other groups rallied in Sydney over the issue last week.
The Government claims the policy protects farm land from "inappropriate mining and coal seam gas proposals" and strikes a balance between the agriculture and mining industries.
The minerals council has created a Land Use Facts website which it says will dispel "myths" about the mining industry that are "being perpetuated for political purposes".