A bill seeking to apply a uniform royalty regime to all new uranium projects in the Northern Territory could disadvantage Aboriginal people, a Senate inquiry has been told. 

Uranium royalties in the territory are currently negotiated by the commonwealth on an individual basis. 

All other mining companies base their payments to traditional owners on a standard rate of 18 per cent of net profits. 

A new bill, introduced to federal parliament late last year, would dictate a standard practice for the uranium royalty regime. 

But there are concerns that basing royalty payments on profits, rather than revenue, could disadvantage the people whose land is being mined. 

At a senate inquiry into the Uranium Royalty (Northern Territory) Bill 2008 in Darwin on Tuesday, Justin O'Brien from the Gundjeihmi Aboriginal Corporation (GAC) said a profit-based system could prove "counter-productive". 

"I think we need to rethink it," he said of the bill. 

GAC represents the traditional Mirarr people, who own the land on which the Ranger uranium mine is operating in Kakadu National Park. 

Mr O'Brien said the GAC had found that an ad valorem system, where royalty payments are based on revenue, proved more beneficial to the local people. 

"Whether or not the mining company is making a profit the Aboriginal people receive an economic benefit," he said. 

"We would much rather a system whereby people receive compensation (for mining on their land) rather than only receiving an income stream when the company is making a profit." 

If the bill went ahead in its current form, Mr O'Brien warned it could pose a number of problems. 

"(It) could very well act as an impediment to further development," he said. 

"Aboriginal people would be less likely to sanction uranium mining under a profit-based royalty regime ... 

"It takes a long time for a mining company to turn to profit ... that can take up to 10 or more years. 

"Unless there are alternative arrangements made, that would be a period during which no benefit would be paid to traditional owners and that would be a disincentive." 

Dave Sweeney, from the Australian Conservation Foundation, said the bill needed to hand control back to indigenous people. 

"The first (question) that should be asked is do the communities want it," he said outside the hearing. 

"Rather than assuming, rather than dictating, rather than imposing, ask ... 

"There are major questions about traditional decision making and the ability of people to say yes or no to developments." 

Mr Sweeney also called on the senators to consider the environmental impacts of uranium mining and consider ways to introducing mandatory safeguards into the bill. 

"There is a whole range of concerns that the Senate should be mindful of and the government should be addressing in legislation, not just the one of royalty flows," he said. 

"If you're looking at a bill to expand uranium mining you need to look at a whole range of areas where this industry is failing today." 

The hearings continue on Wednesday.