Midnight Oil played their headline set for the three-day Mundi Mundi Bash north of Broken Hill on Thursday night, as the band embarks on the Australian leg of their final tour.

The Oils have spent much of 2022 in Europe and America, and will play a host of regional dates and charity fundraiser shows before saying goodbye to the touring portion of their career.

Missy Higgins played her own soulful set earlier on Thursday, as the sun set over the ochre-red Mundi Mundi Plains, which are surrounded by wind farms.

The nine-time ARIA winner was joined by children from the Wilcannia Central School Choir for her song Big Kids.

Higgins and her band then joined Midnight Oil for the last two songs of their set, including the Oils' 1990 song One Country.

The three-day bash will also see performances from Jimmy Barnes, Daryl Braithwaite, Kasey Chambers and the Black Sorrows.

Sue Manniche told AAP she had travelled from Macedon in Victoria to attend the bash for the second time, saying she loved the festival's raw earthiness.

"It's about that whole community. Being here, there's good Aussie rock, and it's just sharing music with like-minded people."

Festival goers will also have a range of other activities to partake in, including dunny door painting, helicopter and camel rides over the plains and sunrise yoga.

"We make it a bit different to other festivals," festival founder and organiser Greg Donovan told AAP.

"You can bring the dog. We allow people to have a campfire at their campsites.

"We don't have bars here so people can bring all their own grog, so they're not paying squillions of dollars for their grog here at the festival."

This event comes four months after the inaugural Mundi Mundi Bash in April, which had been pushed back due to COVID-19.

The plains have served as the backdrop for films including Priscilla, Queen of the Desert and the upcoming Hollywood feature Furiosa.

"It's an amazing site," Mr Donovan said of the festival's location.

"You drive over the Barrier Ranges ... and then once you get up to the top and see over the hill, you see right out on the plains and it just goes on forever.

"You can virtually see the curvature of the earth."

The festival has already won favour with Broken Hill locals, who say the influx of some 9000 punters is a welcome sight for the outback town, which usually has a population of about 17,000.

The festival received a $200,000 grant from the NSW government through its Regional Events Acceleration Fund, which Mr Donovan said allowed Midnight Oil to be added to the line-up.

It's expected to be the biggest live concert ever held in outback NSW.

The Broken Hill City Council reported the April event had delivered some $3.5 million to the local economy.

The festival is on track to exceed its own target of bringing $5.4 million in visitor revenue to Broken Hill over three years.

Australian Associated Press