The Greens call to ban new coal mines is receiving much criticism, with the Institute of Public Affairs labeling this move ‘catastrophic’.

On Monday, Greens deputy leader Christine Milne has called for a ban on new coal mines and extensions of existing mines as the Greens step up their negotiations with the Federal Government over the carbon tax. This has since received a sharp rebuke from different parties.

Among them, free market think tank, the Institute of Public Affairs said it would be catastrophic for Northern Australia and would sound the death knell for any serious proposal to economically develop the region.

Director of the North Australia Project at the Institute of Public Affairs, Hugh Tobin, said that the Greens policies would devastate regional Australia and would lock the North into a perpetual state of underperformance given the huge potential of the region.

‘Preventing new coal mines from opening would be catastrophic for the Australian economy, particularly in the North. In New South Wales, Queensland and Western Australia there are 50 coal projects due to start in the next three years alone,’ Mr Tobin said.

‘Coal is the top export for both New South Wales and Queensland. It contributes $8.4 billion to the NSW economy and $20.5 billion to the Queensland economy. A few wind turbines aren’t going to replace the coal industry in terms of jobs or energy output anytime soon.

Last week, mining giant Xstrata indicated that it was closing its smelting operations in North Queensland. Anglo American Mining CEO Cynthia Carroll has also warned that the introduction of a carbon tax could imperil $4 billion dollars of investment in mining projects from her company alone.

Mr Tobin said ‘The resource boom is not assured. We need to create an environment that encourages investment. The Greens are doing everything they can to stop it. Northern Australia should be the future of this country.

Resources Minister Martin Ferguson, one of Julia Gillard's hand-picked climate change commissioners, stressed the importance of the coal sector.

"Not only does the coal-seam methane export industry have a great potential for Australia over the next 10 to 20 years, but so has the coal sector, and I might say the iron ore sector," he said.

He warned that a sudden phase-out of coalmining would spark economic and social chaos.