The Northern Territory says it is leading the way with its clean-up of legacy mines which are a result of weaker regulation in the past, but it is a $1 billion problem that is not easily remedied.

Despite the legacy, the Territory Government wants to attract more mining for northern development and says its improved regulation will protect taxpayers and the environment.

For two decades the Redbank copper mine, in the Gulf Country, has been leaching toxic water into Hanrahan's Creek.

Contamination has been recorded up to 40 kilometres away at the Northern Territory/Queensland border.

In Hanrahan's Creek trees are dead and the pools of contaminated water — where cattle have been known to drink — barely contain any life.

Traditional owners Dwayne Pott and Tony Chong took the ABC to see the discolouration downstream at Moonlight Falls, a culturally significant site.

Mr Pott remembers fishing in Hanrahan's Creek when he was growing up.

"You wouldn't want to do it now ... it's all contaminated ... real sad," he said.

The water in the mine's pit has high levels of metals, from here it seeps into Hanrahan's Creek. ( ABC: Sara Everingham )

Redbank is one of the Territory's legacy mines and one of an estimated 50,000 abandoned mines in Australia.

It was open only briefly in the 1990s under previous owners but an Environment Protection Agency (EPA) report says it has been leaching toxic water since.

Mr Pott and Mr Chong are working for the mine's current owner as caretakers of the mothballed site.

They said that not only has the mine damaged the country but also it was not open for long enough to have made much of a contribution to economic development and jobs.

Remediation cover doesn't cover works' expected costs

The Northern Territory Government is trying to attract more mining as part of its plans to develop the north.

Mr Pott said he was not against the plan, but only if the mines are properly developed.

"It's hard to get work out here ... it would have been good if the mine was running properly, no disturbance like this," he said.

For now however, after two decades of pollution, traditional owners simply want Redbank fixed up.

The mine's infrastructure now poses a safety risk and will have to be pulled down. ( ABC: Sara Everingham )

The Northern Territory Government has decided the only way to get Redbank cleaned up is to take over the site.

It said it is in talks with the owner about taking back the lease.

Successive owners of Redbank have had plans to get the mine back up and running to fund rehabilitation but have not had the means to do it.

The current owner, Redbank Copper Ltd, is a small company with small pockets and its subsidiary Redbank Operations Pty Ltd are already in court challenging more than a million dollars in fines from the EPA.

In a statement, the company said the problems at the mine were created under previous owners and that it is working with the Government on remediation.

Redbank's security bond to cover damage at the mine will not cover remediation costs.

News Corp has reported the security bond is $150,000 but the Government has estimated it could cost close to $10 million to complete the work that is needed.

NT 'at the front' in ensuring development properly managed

The head of the Government's Legacy Mines Unit, Mike Fawcett, has insisted taxpayers would not pick up the bill.

He said the Legacy Mines Unit — a four-person team working on the territory's billion-dollar legacy mine problem — is beginning work on 16 legacy mines, including Redbank, using funds from a levy on mining companies that was introduced two years ago and is now paying dividends.

Mr Fawcett said the levies put the Territory's work on legacy mines well ahead of what is being done in other states.

Even so, he acknowledges not all the damage will be fixed.

Mike Fawcett from the Legacy Mines Unit meets traditional owners at the mothballed Redbank mine. ( ABC: Sara Everingham )

The levy is expected to bring in $10 million this year but the Territory estimates its legacy mine liability is 100 times that amount at $1 billion.

"So $10 million dollar a year — we're never going to clean all of those up so we're trying to find smart ways to reduce impacts," Mr Fawcett said.

By the Government's own admission, there is not much room in the budget to fix up any more legacy mines.

But Mr Fawcett thinks the Territory is well placed to avoid repeating past mistakes.

The Government now requires companies to pay higher security bonds which Mr Fawcett said are not discounted "right back" like in some other states.

He said the Government is planning new regulation requiring companies to plan for mine closure before mining begins.

"I think the Territory really is at the front of ensuring that we get development and development is properly managed so that we don't get a legacy, we just get the benefit," he said.

Mining has 'massive potential' in NT

Mike Fawcett finds an animal bone in Hanrahan's Creek, stained from high levels of metals. ( ABC: Sara Everingham )

Drew Wagner from the Northern Territory branch of the Minerals Council of Australia said despite the current downturn, mining in the Territory has "massive potential" and is a big contributor to the economy.

But he has warned some of the conditions being imposed — and the low price of commodities — will push investors to move their money interstate.

"Anything that has an adverse policy framework at this stage is going to detract from potential investment, it's as simple as that," Mr Wagner said.

However David Morris from the Environmental Defender's Office thinks the Government has not gone far enough.

He said he wanted more done to avoid problems in the first place.

Mr Morris said successive territory governments have dragged their feet updating the Territory's environmental approval laws that would stop projects slipping through the cracks.

Last year, following a push to develop the north, the Northern Territory Government was criticised by the EPA for failing to refer a mine for proper environmental assessment.

"We've had a lot of statements just very recently about upgrades to the environmental laws in the Territory and they're good but they are, at the moment, just talk," he said.

The mining industry supports the proposed laws saying they will give investors more certainty.

Strong environmental protection laws 'fundamental'

Chief Minister Adam Giles said he wants to attract more mining for economic development.

But recently he announced consultation on the new laws would not finish until after next year's election.

Mr Morris said the laws are crucial for northern development to be viable.

Tony Chong (L) and Dwayne Pott (R) say they are sad to see the damage to the country where their ancestors grew up. ( ABC: Sara Everingham )

"How do we ensure that when we're developing the north we do so in a manner that is sensible, sustainable and looking forward in a form of stewardship for future generations?" he said.

"Having strong environmental protection laws is fundamental to ensuring that those things occur."

Mr Morris said the Territory's billion-dollar legacy mine problem, being fixed with just $10 million a year, is a sobering reminder of the cost of getting development wrong.

In the Gulf Country, Mr Chong has seen the cost first hand.

He said he wanted Indigenous land holders to be at the centre of plans for future development on their country.

He said traditional owners do not want to be left behind, or left with long-term costs.

"If we've got to something there that's going to look at the long-term sustainability for our kids, we'd be happy to have a mining company but as long as it's done in that right mining standard," he said.