Mining giant Glencore attempted to downplay the seriousness of the contamination at its McArthur River Mine (MRM) operation to the NT Government, as it tried to argue against having to increase its environmental security bond.

Key points: Mine's rehabilitation security bond was $111 million last year

Mine's rehabilitation security bond was $111 million last year Government rejected Glencore's bond and dump management arguments

Government rejected Glencore's bond and dump management arguments $2,500 in taxpayer funds secured on party to celebrate mine's 20 years

A Freedom of Information (FOI) request by the ABC on Chief Minister Adam Giles' correspondence has revealed that on August 25 2015, the day Mr Giles threatened to shut the mine, the company mounted a spirited argument against raising the bond.

But much of that argument was dismissed in briefings to Mr Giles and the Mines and Energy Minister Dave Tollner by his department.

The documents reveal Mr Tollner's office secured $2,500 from parliamentary protocol funds to host a cocktail party at Parliament House to celebrate the McArthur River Mine's 20 years of operations, on August 24 2015 — the day before the Chief Minister threatened to close the mine.

Glencore has said it was not invited to any such party.

The documents also show the NT Chamber of Commerce wrote to Mr Giles saying it was "concerning that the Government is taking a hard line on a revised security bond, which is believed to be at a level that could endanger the mine's continued operation".

Lack of detail in mine proposal

Mr Giles said he would order the closure of the mine unless Glencore increased the $111 million security bond, because of mounting community concern about the company's huge waste rock dump, which spontaneously combusted sending plumes of toxic sulphur dioxide over the Gulf of Carpentaria for more than a year, beginning in 2013.

After the company extinguished the dump fire last year, the concern of the four Indigenous clans living downstream of the mine, on the McArthur River, was increased by revelations that fish found in tributaries on the mine site were contaminated with lead.

Borroloola locals protest against Glencore's McArthur River Mine operation. ( Supplied: Padraic Gibson )

The documents show that the Department of Mines and Energy (DME) had been pushing the company to increase its security bond since February 2015.

"DME currently holds $111 million as security for the mine. This is not sufficient for the level of current disturbance and activity," a briefing to the Chief Minister said.

After Mr Giles issued his threat to close the mine in August 2015, Glencore wrote to him saying it had calculated a security bond "in accordance with the Department of Mines and Energy's [DME] security calculation tool on the basis of our current authorisation".

But the DME chief executive Ron Kelly dismissed Glencore's argument that any significant increase in the security bond "needs to be considered in line with detailed engineering designs and scientific designs".

"McArthur River Mine has not provided detailed engineering designs or scientific justification to support the closure process," Mr Kelly said.

Mr Kelly added that the lack of detail had required DME to ensure the bond would pay 100 per cent of the cost of returning all of the mine's waste rock and tailings, into its mining pit.

Bond upped, but kept secret

In October last year the company and the Government agreed on an increase to the bond, but both have refused to say what amount is now being held.

Defending its management of the waste rock dump, Glencore told Mr Giles it had "not exceeded the agreed to amount of reactive rock deposited at the mine site".

The Department briefed the Chief Minister that "there is no 'agreed to amount' of reactive rock" and that Glencore would be required only to put non-reactive rock on its waste dumps until it had completed a new Environmental Impact Statement (EIS).

The new EIS, which has not yet been submitted by Glencore, will determine whether the company can continue with a major expansion.

Glencore wrote to the Chief Minister saying that "testing of popular food fish upstream from Borroloola and near King Ash Bay did not indicate that bioaccumulation of lead had occurred in these fish and hence are safe to eat".

But DME dismissed that, saying: "There is presently insufficient information to make this statement categorically".

Since the correspondence, a government-commissioned consultant, Hydrobiology, rated the risk of eating fish from areas near the mine as "low".