Explosives used in mining operations release reactive nitrogen (N) that discharge into surrounding waters. Existing pond systems at mine sites could be used for N removal through denitrification and we investigated capacity in tailings and clarification pond sediments at an iron-ore mine site. Despite differences in microbial community structure in the two ponds, the potential denitrification rates were similar, although carbon limited. Therefore, a microcosm experiment in which we amended sediment from the clarification pond with acetate, cellulose or green algae as possible carbon sources was conducted during 10 weeks under denitrifying conditions. Algae and acetate treatments showed efficient nitrate removal and increased potential denitrification rates, whereas cellulose was not different from the control. Denitrifiers were overall more abundant than bacteria performing dissimilatory nitrate reduction to ammonium (DNRA) or anaerobic ammonium oxidation, although DNRA bacteria increased in the algae treatment and this coincided with accumulation of ammonium. The algae addition also caused higher emissions of methane (CH₄) and nitrous oxide (N₂O). The bacterial community in this treatment had a large proportion of Bacteroidia, sulfate reducing taxa and bacteria known as fermenters. Functional gene abundances indicated an imbalance between organisms that produce N₂O in relation to those that can reduce it, with the algae treatment showing the lowest relative capacity for N₂O reduction. These findings show that pond sediments have the potential to contribute to mitigating nitrate levels in water from mining industry, but it is important to consider the type of carbon supply as it affects the community composition, which in turn can lead to uwanted processes and increased greenhouse gas emissions.