A proposal to turn an abandoned mine in the New South Wales Riverina region into a garbage dump is dividing the local community.

Farmers around the Ardlethan tin mine said they had major concerns about the plan to bring millions of tonnes of Sydney's waste into the region.

However, supporters said the dump could bring jobs and money to a tiny town, which relies heavily on agriculture.

Australian Tin Resources director Peter Francis, who now owns the tin mine site, said it could be profitable for Ardlethan and Coolamon Shire.

"Our plan is to use part of the site as a putrescible landfill site to take landfill mostly from Sydney, about 200,000 tonnes per year and a smaller volume to be delivered by road from the local Coolamon Shire," he said.

"And the reason for that is there's a looming severe shortage of landfill capacity in Sydney."

Coolamon Shire Mayor John Seymour said the plan was worth considering.

"We see all over the countryside where a lot of these small places are really on life support, if the population's not there or decreases. That's when problems start," he said.

Australian Tin Resources director Peter Francis says a landfill site could benefit local residents. ( ABC News )

Coolamon Shire Council general manager Tony Donaghue said the town is too reliant on agriculture and the landfill site could be an alternative way to bring money and jobs to Ardlethan.

"A population the size of Ardlethan - 400 to 450 people - with an opportunity of 20 to 30 long-term jobs is something that should be considered," he said.

"There will be amenity issues and there will be a need to assess the environmental impacts that may occur, and that's part of an environmental impact study and an assessment from there."

A similar landfill plan was proposed for the mine site in the 1990s but did not pass environmental scrutiny.

Mr Francis said improvements in technology would get the proposal over the line.

"I can't say that we will never have any odour, but I can say it will be well-managed and there are very prescriptive regulations and guidelines that we need to comply with relating to how that issue will be managed," he said.

"It's policed by the EPA (NSW Environment Protection Authority) and if you don't meet your obligations there are consequences."

Dump could bring 'pests, pathogens, diseases'

Grain and livestock farmers around the mine site are not convinced.

Farmers are worried the landfill could damage prime agricultural land. ( ABC News )

Local farmer and president of the newly-formed Don't Rubbish the Riverina group, Renee Doyle, said there are too many risks.

"Rubbish is a known way of harbouring pests, pathogens, diseases," she said.

"They're sitting it on top of a hill, a site very exposed to the wind.

"Cropping country comes within 100 metres of those landfill areas."

Mrs Doyle said she believes it is something that should concern all NSW residents.

"If this proposal can be approved, on top of a hill in the middle of prime agricultural country, it can be approved anywhere.

"Fundamentally that site just does not fit the bill.

"It is at the top of a valley, which leads to a town, which leads to a creek.

"You've got the impacts of smell, the potential worries about the runoff and you've got all your cropping country surrounding that hill.

"So if that's approved there I assume other companies will be looking at that and saying if they can get approved there we'll get it approved somewhere else because there's money in waste."

Australian Tin Resources plans to have its environmental impact statement ready to present by early next year.

That means any NSW Government approval for this project is still some way off.