Iron ore company 'undermines' promises after failing to pay traditional owners

The open-pit Roper Bar iron ore mine has been plagued by financial issues for several months. (Supplied: Nathan River Resources)

The Northern Land Council says Nathan River Resources undermined its own promises to traditional owners by failing to pay royalties before it collapsed.

The company went into administration last month and owes about $360 million to a range of creditors including the NT government, contractors and staff.

The NT government says it will ensure the company meets its environmental rehabilitation obligations.

The Northern Land Council says Nathan River Resources' [NRR] failure to pay it more than $2 million in royalties before it collapsed undermines the promises it made to traditional owners.

NRR went into administration in late May with about $360 million owed to a range of creditors including the NT government and traditional owners.

This followed a prolonged period of financial trouble where the company also stood down workers without pay in April and stopped operations at the Roper Bar site, 600 kilometres south-east of Darwin.

The ABC understands Aboriginal people in the nearby town of Borroloola who were employed by NRR were also owed several weeks of unpaid wages.

Yuseph Deen said traditional owners agreed to mining activities on the basis that companies would meet their end of the deal. (Supplied: Northern Land Council)

The Northern Land Council [NLC] represents traditional owners in these matters and CEO Yuseph Deen said royalties were paid to deliver economic benefits to communities close to the mine.

He said NRR's failure to pay would have serious impacts on the community.

"Given the history of mining and exploration activities on native title land in the region the impact of the unpaid monies is significant," he said.

"Native title holders have agreed to mining activities on the basis that companies will comply with their obligations, including making agreed payments.

Road trains had transported ore from the mine to the Bing Bong port. (ABC News: Michael Franchi)

Traditional owners were also concerned about the environmental impact of the mine and whether the site would ever be rehabilitated given NRR's financial problems.

Staff have alleged NRR's operations were polluting the environment near the loading, barging and mining operation.

Mr Deen said rehabilitating the site was critical to protect the long-term interests of Aboriginal communities in the region, and expected the NT government to enforce this.

"The NLC expects that there should be appropriate security arrangements in place with the NT govern