The grant will cover all but $26,350 of the $106,350 cost of producing the Dubbo City Mining Growth Strategy.

Dubbo City Council has begun working on the strategy that will be placed on public exhibition in early 2014.

Council's economic development officer Josie Howard reports that the strategy will ready the city for the potential positive and negative impacts associated with mining and related services in the Orana region.

"With great connectivity through transport and technical infrastructure, a ready and skilled workforce, existing stable economic foundations, and a solid industry base, Dubbo is very well situated to benefit economically from these types of projects," she said.

"The strategy will help ensure the city makes the most of the opportunities and that our social economy is well serviced to manage the changes associated with the potential upcoming developments."

Talks with stakeholders in sectors such as mining, manufacturing, health and city infrastructure are underway.

"Council has also engaged research and statistical analyst professionals to develop project scenarios including the impacts associated with mining developments, and to assist with data modelling to represent future mining growth in the region and the city, including its potential effects on the city and city services," Ms Howard said.

"Once this stage is complete, council can then strategise how to best manage the likely and/or potential impacts of mining on the city and prepare the draft Dubbo City Mining Growth Strategy."

The Dubbo 2036 Community Strategic Plan identified the city's opportunity to cash in on mining.

"The region is resource rich with a variety of coal, coal seam gas and rare earth minerals which will see the mining sector undergo major expansion," it states.

"The economic opportunities in supporting this expansion will be significant for Dubbo and the region. Infrastructure and planning for this expansion is a major issue."

Dubbo MP Troy Grant announced the $80,000 grant under round eight of the Planning Reform Fund.

"This is great news not only for Dubbo but the region as this funding will enable council to investigate the development and expansion of the mining industry in the Dubbo local government area and the wider Orana region," he said.

Dubbo City Council will contribute the remaining $26,350 to the strategy.

Ms Howard said implementation of the strategy would follow its adoption by the council.