Mukesh Kumar, Vedanta's CEO, said that the plant had been running at around 20% capacity and incurring heavy losses in the process.
The company forewarned the Odisha government as far back as September 2012 that it was running short of bauxite and would close the refinery on December 5 if the supply issues had not been rectified.
The Lanjigarh facility needs between 10kt to 11kt daily to function normally but was unable so secure more than 3k per day despite several meetings with Odisha's chief minister, Naveen Patnaik, and the Government's chief secretary.
The plant's closure will mean job losses for its 3,000-strong workforce and will indirectly affect a further 4,500 people.
A 75mW captive power plant will also have to shut down due to uncertainty surrounding the refinery.