The Northern Territory town of Pine Creek has been shattered by news that its biggest employer, the Frances Creek iron ore mine, will be shut-down by November, causing hundreds of job losses.

Local business owners have told ABC Rural they were advised of the closure at a meeting with the company, Territory Iron, late last week. Residents from the Kybrook Farm Aboriginal community have also been informed of the shut-down.

Mining services contractor Ray Wooldridge attended the Pine Creek meeting, and says locals were told operations would start winding down at the mine immediately.

"Basically [they said] it would be all over by November, apart from a small exploration crew and an environmental crew to look after the mine shut-down," Mr Wooldridge said.

"Last December they said the workforce was around 320, and by November this year it will be down to 20."

Around 600 people live in Pine Creek, 200 kilometres south of Darwin, a town which relies heavily on jobs and trade generated by the Frances Creek mine.

Mr Wooldridge says local residents and business owners have been left reeling by the decision, and now face an uncertain future.

"Any closure of a mine is serious, and it will have a big economic impact," he said.

"It will effect the social fabric of the town. You can't take that number of people out of a town and not have an impact.

"But Pine Creek is a resilient town. It was founded on the mining industry and the railways, and it will continue to be a mining town.

"It has a good heart and a strong community."

Territory Iron announced plans to expand its operations in mid-May, despite falling iron ore prices.

However ABC Rural understands night shifts have already ceased at the mine, with workers to be gradually stood-down over the coming months.

Mr Wooldridge says although the future of the Frances Creek operation looks grim, he's hopeful mining may re-start once economic conditions improve. Listen Duration: 4 minutes 51 seconds 4 m 51 s Listen Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. More than 300 jobs are under threat as Territory Iron prepares to close the Frances Creek mine ( Carmen Brown ) Download 2.2 MB

"You would think if the iron ore price crept back, and did get up around $120 [per tonne] again, then maybe there is an option to re-open," he said.

"I asked at the meeting if they had done any long-term projections, and they said that they couldn't see any short-term change.

"But they've got some mechanical construction work ongoing at the moment, they're going to complete that, they're not just walking out.

"So the signs are good that if the economics came back, then maybe the mine would re-open, and certainly the town is hoping that it would be the case.

"But all the time while this is going on, the iron ore price is decreasing, and you can't mine if you can't make money."

Questions remain over Territory Iron's future

ABC Rural has contacted Territory Iron for comment on several occasions, but the company is yet to respond.

In a statement from its parent company, Noble Group, Noble spokesman Stephen Brown said, "the re-configuration of the Frances Creek mine is in response to the current market conditions and is aimed at ensuring its continued operating viability."

In a statement published in the local Pine Creek community newsletter, Territory Iron flagged some of its issues and said it was up against 'some of the largest challenges it has had to face'.

"The month of June has seen a reduction in production and processing of shippable ore due to challenges faced with accessing our proposed satellite pits at Elizabeth Marion," the statement read.

"Unfortunately, we now have been notified by NT Environmental Protection Authority (EPA) that the proposed approval for mining at Elizabeth Marion will require an extensive Environmental Impact Assessment (EIS) before any work can commence.

"The decision is unexpected, given the small size of the proposed works.

"The EIS will be commenced immediately however this process is expected to be completed by mid to late 2015.

"Our current minable resources are also further challenged with declining iron ore prices which remain 30 per cent down on what was projected this year.

"The unprecedented combination of the EIS requirement and declining iron ore prices is creating some of the largest challenges Territory Iron has had to face.

"These challenges are being met head-on with all site teams working tirelessly to identify the most viable options for the operation."

Rival company Sherwin Iron also confirmed job losses at its Roper River operation earlier this week, with around 50 workers stood down at the site.