Soldiers standing on the back of pick-up trucks patrol Lazaro Cardenas, one month after ousting the municipal police in this major Mexican port that had become a drug cartel's cash machine.

While troops armed with assault rifles ride in borrowed police vehicles, a vice admiral has taken over the administration of the Pacific port, which handles the largest general cargo volume in Mexico.

The military was sent by President Enrique Pena Nieto on November 4 to clean house, forcing the city's 113 local police officers to undergo vetting exams while replacing the port's two top civilian jobs with naval officers.

The government has said it received anonymous tips about unspecified corruption and "collusion" at the port.

The Knights Templar cartel has used Lazaro Cardenas to import precursor chemicals from Asia and make methamphetamines in makeshift mountain labs in the western state of Michoacan.

In January 2012, 195 tons of such chemicals were seized in 12 containers from China.

But the cartel has branched out, extorting container truck companies as well as exporting iron ore to China after illegally extracting the mineral in Michoacan, according to government and industry sources.

The deepest port in Mexico has grown exponentially over the past decade, with cargo movement doubling to 36 million tons this year.

Stacks of containers rise like metal towers, as giant cranes move them onto and out of ships heading to or arriving from Asia.

Benjamin Rodriguez, president of the local Business Coordination Council, said the the military has made the city safer.

"The port is a strategic point for organized crime," Rodriguez told AFP.

"There's extortion and another resource they have recently handled is minerals. They have become mining entrepreneurs," he said.

Rodriguez said he has asked visiting Chinese businessmen: "How is it possible that they are sending raw minerals to China?"

'A recognized problem'

Virgilio Camacho Cepeda, a local executive of global steel giant ArcelorMittal, publicly denounced the illegal extraction of minerals for a long time.

In April, the interinstitutional relations director was found dead on the city's outskirts with a bullet in the head.

Nobody has been arrested so far and investigators are taking testimony, said a spokeswoman for state prosecutor's office. The motive remains unknown.

The Luxembourg-based company declined to comment on Camacho's murder, but a spokesperson said in a brief statement that "illegal mining is a recognized problem in the state of Michoacan."

A representative of a mining company, who requested anonymity for him and his employer for security reasons, said the cartel sends truckloads of illegally-obtained iron ore to the port using papers that appear legitimate.

Cartel operatives steal directly from legal mines or extract minerals without permits.

"It's as if someone came to your house, settled in the backyard and did whatever he wanted," the source said.

A federal government official, speaking on condition of anonymity, said authorities had "testimony from detained Templars" and evidence proving such activities were happening.

The economy ministry said the illegal extraction of iron ore first emerged in 2010 in Michoacan and the neighboring states of Colima and Jalisco.

"This illegal activity is fueled by the great demand in iron ore from countries like China that need it for their industrial development," the ministry said in an e-mailed statement.

"For this reason, seizing on the proximity of the port of Lazaro Cardenas, many companies began to stock up on great quantities of iron ore that they obtained legally or illegally, which was then loaded for export," it said.

To address the problem, the government tightened regulations, requiring exporters to have a permit showing the mineral's origin.

Extortion goes on

Another major source of revenue for the mafia it the protection money it demands from an array of businesses.

Two truck transport executives said on condition of anonymity that they are still receiving threats despite the military presence, with gangsters demanding 1,000 pesos ($75) per truck per month.

"They ask for a 'monthly collaboration' which we can't disagree with because they burn trucks" or hurt people, said one manager.

Another executive said the gangs steal cargo, especially electronics.

"The army is doing nothing. They patrol the streets but we still have problems," the executive said.

But the port's new administrator, Vice Admiral Jorge Luis Cruz Ballado, said he did not have information about illegal activities at the port and that his mission was to ensure the smooth movement of cargo.

"Right now I can assure you that the port is safe," he said. "It's a reliable port."