KUALA LUMPUR, Nov 4 (Reuters) - Malaysia will issue bauxite mining licences to companies in December or January, a minister said on Monday, marking a resumption in activity after a ban was put in place in early 2016 over unregulated mining and water contamination.

The Southeast Asian country was once the biggest bauxite supplier to top aluminium producer China, with shipments peaking at nearly 3.5 million tonnes a month around the end of 2015. Most of Malaysia’s bauxite, an ore used to produce aluminium, is mined near the east coast port city of Kuantan in Pahang state.

The government lifted the ban earlier this year, but later added that bauxite miners must conduct an environmental impact study on their sites before receiving licences to restart operations.

It has imposed stricter standard operating procedures (SOP), including capping monthly bauxite exports at 600,000 tonnes and creating a buffer zone between mining sites and residential areas.

Xavier Jayakumar, Malaysia’s water, land and natural resources minister, told reporters in parliament that a six-month monitoring process would start once licenses were issued next month or in January. Pahang is considering applications from three local companies, he said.

“We want to make sure the SOP is adhered to and if there are any loopholes, we strengthen those areas,” Xavier said, adding that increasing the export limit would depend on the Kuantan port’s capacity. (Reporting by Joseph Sipalan; Writing by Krishna N. Das; editing by Richard Pullin)