The management of post-consumer discarded plastic wastes (PCPW) creates new challenges in developing countries due to the lack of amenities, technological interventions, and associated negative environmental externalities. The fate of untreated recyclable and non-recyclable plastic wastes lies in open dumping along with other solid waste, and improper management leads to environmental externalities such as pollution, global climate change, and health issues. Additionally, open dumping upsurges the emerging microplastics and nano plastics (MNPs) contaminants. The externalities depend on the waste generating sources (household, industries, commercial), waste composition, and its characteristics. However, urban mining can minimize environmental externalities where waste plastics can convert into potential anthropogenic resources and also helps in achieving the target of sustainable development goals (SDGs 11 & 12). Moreover, various treatment technologies that help in the sustainable utilization of plastic wastes are extensively reviewed in this study and evaluate the costs benefits arising during various stages of treating plastic waste through recycling (R), incineration (I), and landfilling (L). The recycling of plastic waste has demonstrated the lowest impact on global warming potential (GWP) and total energy use (TEU), followed by landfilling and incineration (R < L < I). Nevertheless, when energy is recovered from inert (non-recyclable) plastic waste in the form of fuel or by its utilization in construction purposes, the environmental impacts are more negligible (Incineration < Landfilling). Therefore, this study determines the significance of circular economy with legislative approach and standards on plastic waste management, which help in reducing environmental externalities besides yielding a secondary resource as energy and materials through urban mining. A sustainable plastic waste management (SPWM) model is proposed for developing countries to convert plastic waste into resources and use it as a sustainable tool in urban mining.