Authorities in Mexico have been holding four Chinese ships and their crews since May as they try to end drug cartels' involvement in iron ore sales.
Some 95 Chinese crew members are on the ships, sources with knowledge of the matter say, and they are encountering health problems related to being stuck on board for months.
Mexico started cracking down on drug cartels' involvement in the iron ore business in March, reports The Financial Times, a British newspaper. The illegal organizations earn about US$ 15 for each ton of exported ore. One group, called the Knights Templar, smuggled some 272,000 tons of ore in 2013, about 44 percent of Mexico's output.
Best Vision, a ship owned by Fuzhou Ocean Faith Shipping Ltd., was detained in the Pacific Ocean port of Manzanillo after customs officers examined the iron ore it had on board on May 6. Mexican customs officials said that since the ore sellers involved could not prove their product came from a legitimate source, the ship could not depart. Fuzhou Ocean Faith is based in the eastern province of Fujian.
The Luyang Eagle, owned by Luyang Group, from the eastern province of Shandong, finished loading ore at Lazaro Cardenas on May 17, and was not permitted to set sail for the same reason.
Mexican authorities told Ocean Faith and Luyang Group that their ships could not leave unless they unload their ore, a manager at Ocean Faith said.
One ship each from Ningbo Economic Technology Development Zone Longsheng Shipping Co. Ltd. and Fujian Huarong Marine Shipping Group Corp. are in similar situations.
A lack of both experience and risk awareness explains why Chinese shipping companies are running into such problems, said a source from the Baltic and International Maritime Council (BIMCO), the largest international shipping association representing ship owners.
Mexico has many shell companies involved in the iron ore business, which allows the drug cartels into the industry, the BIMCO source said. Ship owners and ore buyers should be aware of the risks or pay for their mistake.
Ship owners did not do anything illegal, but because Mexican authorities could not root out all the shell companies, they detain vessels, the source said.
Ocean Faith and Luyang Group have lost a combined US$ 6 million related to ship rentals, crew salaries and other expenses, the manager at Ocean Faith said. Unloading the iron ore would cost a further US$ 1 million per ship.
The manager said Chinese shipping companies expected Mexican authorities and the companies that sold the ore to handle the problem.
Ocean Faith and Luyang Group have asked China's embassy in Mexico for help, said a source with knowledge of the matter. The ships would suffer maintenance problems related to their lack of use, the source said.
Source: english.caixin.com
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