The Jharkhand Government in India has closed five of Hindalco Industries' bauxite mines under the central government's directive to shut down mines operating under temporary leases.
Mines are being closed following a commission report which claimed that illegal mines have caused losses to the exchequer and had a negative impact on the environment.
Jharkhand Lohardaga district mining officer DN Singh was quoted by Live Mint as saying: "Hindalco and its subsidiary, Minerals and Minerals, have nine bauxite mines; I have got five of them closed.
"The letter for closure came on 8 September and this was in accordance with the central government's amendment of the Mines and Minerals (Development and Regulation) Act in July, which says mines running on deemed lease must close."
The affected mines are Hindalco-operated Hisri Old, Hisri New, Bhusar Kekrang and Bagdu Bhusar, and Minerals and Minerals-operated Pakhar mine.
All five mines had been operating under second deemed renewals and accounted for 45% of bauxite output in the state.
Hindalco produces around 2.23 million tonnes of bauxite in Jharkhand. Closure of the five mines will reduce production levels by just over one million tonnes.
In addition, the closure of Maliparbat mine in Odisha state on 29 August has further reduced the bauxite output by 0.6 million tonnes.
In the last five years, Hindalco has spent around $5bn on new projects such as the Mahan Aluminium smelter in Madhya Pradesh, and the Utkal Alumina refinery and Aditya Aluminium smelter in Odisha.
The state government had earlier sent similar closure orders to 12 iron ore mines of Tata Steel and Steel Authority of India.
Following the closure of the Noamundi iron ore mine in Jharkhand, Tata Steel is planning to import around 0.5 million tonnes of iron ore a month for its India operations, two sources close to the matter told Bloomberg.