The federal government is facing a lawsuit over damage done to Indigenous land by the decades-old mining project that sparked the Yirrkala Bark Petitions.

Gumatj leader Galarrwuy Yunupingu revealed on Saturday that he and his people were taking legal action against the commonwealth, seeking compensation for the loss of native title over the minerals exploited by mine operator Nabalco and its successor, Rio Tinto, as well as the destruction of key dreaming sites.

The suit is expected to use the historic precedent set by the Timber Creek judgment by the high court in March, which ruled on monetary compensation for loss of native title.

“They’ve come to Gove peninsula without asking properly of the landowners of the place,” Yunupingu told the crowd at Garma festival, in north-east Arnhem Land.

“They have all come, getting the OK from the PM and the government of the country, to come all the way and start digging and insulting the country.”

He accused the two companies of having “ripped some land unmercifully”.

“They have damaged our country without seeking advice to us and they have damaged a lot of dreamings – dreamings that were important to Aboriginal people.”

He said the companies failed to ask the local people where they could and couldn’t go on the Gove peninsula in north-east Arnhem Land.

Traditional owners have received royalties from the mine, a fraction of the total revenue drawn from the site. They have recently opened their own mine and training centre, Gulkula Mining, of which Yunupingu is chair.

Prospecting for what would become the bauxite mine and refinery began in the 1950s, and Yolngu traditional owners were strongly opposed.

Leases were granted and excised without consultation of the people of Yirrkala, and the now historic Yirrkala bark petitions were delivered to the federal government in 1963. Yunupingu, whose father was then Gumatj clan leader, helped draft the petitions.

However, the mine went ahead, with the Gove agreement signed five years later between the commonwealth and Nabalco.

Traditional owners took the mine to court in 1971, the first ever native title litigation, but lost, with the judge citing the doctrine of terra nullius in his judgement.

The loss sparked the establishment of the Woodward royal commission, and NT land rights act.

The case flagged by Yunupingu on Saturday will rest on the precedent set by this year’s Timber Creek decision from the high court, which awarded more than $2.5m in compensation to native title holders over dozens of acts by the NT government between 1980 and 1996 which were later found to have “impaired or extinguished” native title rights and interests.

More than half the amount was to compensate for “cultural loss”.

The March judgment reduced the amount ordered by the federal court in 2016 but otherwise held up the new precedent of quantifying the monetary value of native title and associated compensation for the removal of land rights.

Native title experts responded to the ruling with predictions it would pave the way for potentially billions of dollars in liability payments by Australian governments.

The attorney general, Christian Porter, said on Sunday: “There is a well established process for native title claims and those processes would be followed for any such claim lodged regarding bauxite mining.

“I note that at this point what has been said is an intention to lodge a claim and that a claim has not yet been lodged.”