Jabiru town was built for the Ranger mine which has been operating for more than three decades, but Aboriginal land owners have refused to back the renewal of its mining authority beyond 2021.
Now, Traditional Owners are in talks with the Commonwealth and NT governments over a future plan for Jabiru, while negotiations over a new township lease are underway.
Gundjeihmi Aboriginal Corporation, which acts for the Mirarr Traditional Owners, outlined the environmental and cultural concerns behind the decision to cease mining.
"You have Australia's largest national park, Indigenous communities living downstream from the mine and a very sensitive ecosystem around it," Chief Executive Officer Justin O'Brien said.
He said Jabiru was the gateway to Kakadu and should continue to function without the mine as a tourism hub and regional services centre.
But a report commissioned by Rio Tinto's Energy Resources of Australia (ERA) states the planned removal of critical infrastructure, electricity and water supply, from the 1100-strong town could lead to the displacement of residents and severe job losses.
It may also reduce health and education services, and result in the closure of the airport, which would affect tourism.
ERA estimates it will cost $507 million to clean up and rehabilitate the site, which must be reintegrated into the surrounding World Heritage-listed Kakadu national park by 2026.
The report says residents and business owners were already suffering anxiety over an inability to plan and make decisions about their lives.
"There is still uncertainty about the future and while there may be a widely held view that Jabiru can have a future beyond 2021, it is not yet known what that might look like, what changes may take place or when," ERA chief executive Andrea Sutton said.
ERA isn't developing a road map for Jabiru beyond the lease expiration when production stops, which is expected to cost 350 jobs.
Gundjeihmi Aboriginal Corporation CEO Mr O'Brien warns that if the NT government doesn't urgently commit to the town's future, it will effectively be demolished.
"We've seen a steady erosion of the amenity of the town, and it's a self- perpetuating down spiral; the more people who leave, the worse it gets, the more people leave," he said.
"The opportunities for certain business to expand or even exist have been lost, and it's been over 14 years since we first wrote to both tiers of government bringing these issues up," he lamented.