The Northern Territory Department of Resources said it is investigating an unleaded fuel leak at the Rio Tinto Alcan mine.

The NT Department of Resources said up to 70,000 litres of unleaded fuel that leaked out of a tank at a Rio Tinto refinery at Nhulunbuy on the Gove Peninsula has been kept contained within the spill area.

"We are comforted at this stage that the fuel hasn't reached the harbour and is contained within the burn area surrounding the tank farm," said NT Department of Resources executive director of minerals and energy Alistair Trier.

Trier said the department was informed about the spill by Rio Tinto last Friday. He said the oil leak is considered significant and is being investigated. The department has ordered Rio Tinto to clean up the site and remove the fuel from the environment.

"That's a serious concern to us, because fuel entering the environment is a serious environmental risk," said Trier.

Trier said under the Mining Management Act, Rio Tinto may have to face penalties, including fines. He added that the oil leak was going to cost the mining company "a significant amount of money" to pay for the clean-up.

It is believed that the oil leak occurred due to equipment failure such as a burst pipe.

Rio Tinto has yet to comment on the issue.

The Rio Tinto Alcan bauxite and alumina mine is located about 1000 kilometres east of Darwin. It was reported to have produced 6.245 million tonnes of bauxite and 2.325 million tonnes of alumina in 2008.