Problems Loading Iron Ore Cargoes in Mexico

Local Correspondents P&I Services (Mexico) have reported that iron ore exports from Mexico have been complicated since late April 2014.  Serious problems have been experienced by four vessels calling at Manzanillo, each were engaged in the export and shipment of iron ore.

Recently the shipments on board two vessels were confiscated by customs authorities after they had been loaded.  In both cases the authorities alleged that the characteristics of the iron ore did not correspond with those from the mine declared in the customs export application.  The action subsequently taken by the authorities prevented each vessel from sailing and the cargo had to be discharged before they were released.

It is understood that customs authorities attended on board both vessels and took samples of the cargoes already loaded.  These samples were then sent to a lab for analysis, checking its characteristics and composition against that of the Customs Export Application Economy Secretariat Form obtained by the exporters and the shippers.  In both cases, this comparison showed  that the cargo did not originate from the mine declared in the cargo documentation.

The Finance and Public Credit Secretariat then issued a temporary seizure order for the iron ore and the navy secured the vessel and crew.  In line with local customs laws, the authority initiated an administrative trial (named PAMA) and proceeded to confiscate the cargo.  As the cargo had been confiscated it subsequently cannot be exported until the legal process is completed and with no predictable date of commencement of the legal process, both vessels were faced with potentially lengthy delays.

Local news (BBC Latin America & Caribbean) report that the authorities were tipped off by an anonymous phone call after one ship departed Lazaro Cardenas.  In both cases, they reported that the detention of these ships is part of a large scale operation by the administration against organized crime cartels involved in money laundering. Mexico has seized more than 200,000 tonnes of illegal iron ore in recent months, most of it on its way to China.

Local Correspondents recommend that any ship loading iron ore in Mexico should take additional precautions in respect of the cargo documentation.

We remind all Members that regardless of any customs implications, bulk ore cargoes may be prone to liquefaction and must be shipped in strict accordance with the IMSBC Code.

North’s Loss Prevention Briefing on Liquefaction and the carriage of Iron Ore Cargoes can be read on our web site at:/loss-prevention/publications-and-guides/loss-prevention-briefings/