[Federal Register Volume 74, Number 108 (Monday, June 8, 2009)]
[Notices]
[Pages 27090-27097]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-13344]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-832]


Pure Magnesium from the People's Republic of China: Preliminary 
Results of 2007-2008 Antidumping Duty Administrative Review

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: In response to requests from interested parties, the 
Department of Commerce (``the Department'') is conducting an 
administrative review of the antidumping duty order on pure magnesium 
from the People's Republic of China (``PRC''), covering the period May 
1, 2007, through April 30, 2008. This administrative review covers one 
exporter of the subject merchandise.
    We have preliminarily determined that the respondent in this 
administrative review made sales in the United States at prices below 
normal value during the period of review (``POR''). If these 
preliminary results are adopted in our final results of this review, we 
will instruct U.S. Customs and Border Protection (``CBP'') to assess 
antidumping duties on entries of subject merchandise during the POR for 
which the importer-specific assessment rates are above de minimis.
    We invite interested parties to comment on these preliminary 
results. Parties who submit comments are requested to submit with each 
argument a summary of the argument. We intend to issue the final 
results no later than 120 days from the date of publication of this 
notice, pursuant to section 751(a)(3)(A) of the Tariff Act of 1930, as 
amended (``the Act'').

EFFECTIVE DATE: June 8, 2009.

FOR FURTHER INFORMATION CONTACT: Katharine Huang or Eugene Degnan, AD/
CVD Operations, Office 8, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-
1271 and (202) 482-0414, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On May 12, 1995, the Department published in the Federal Register 
the antidumping duty order on pure magnesium from the PRC.\1\ On May 5, 
2008, the Department published a notice of opportunity to request an 
administrative review of the antidumping duty order on pure magnesium 
from the PRC for the period May 1, 2007, through April 30, 2008.\2\ On 
May 29, 2008, in accordance with 19 CFR 351.213(b)(2), Tianjin 
Magnesium International, Co. Ltd. (``TMI''), a foreign exporter of the 
subject merchandise requested that the Department review its sales of 
subject merchandise. On May 30, 2008, US Magnesium LLC (``Petitioner'') 
also requested that the Department conduct an administrative review of 
TMI's exports of subject merchandise. On July 1, 2008, the Department 
initiated an administrative review of the order on pure magnesium from 
the PRC for the POR with respect to TMI. On September 11, 2008, the 
Department issued its antidumping duty questionnaire to TMI.\3\ On 
October 14, 2008, TMI submitted its Section A questionnaire response 
(``TMI's AQR''). On October 29, 2008, TMI submitted its Section C and D 
questionnaire responses (``TMI's CQR'' and ``TMI's DQR,'' 
respectively). On November 12, 2008, Petitioner submitted comments on 
TMI's AQR, CQR, and DQR. On February 23, 2009, Petitioner submitted 
comments concerning TMI's request for by-product offsets. On March 16, 
2009, the Department issued the first supplemental questionnaire to 
TMI. On April 6, 2009, TMI submitted its response to the Section A and 
Section C supplemental questionnaire (``TMI's 1st SAQR'' and ``TMI's 
1st SCQR,'' respectively). On April 8, 2009, TMI submitted its response 
to the Section D supplemental questionnaire (``TMI's 1st SDQR''). On 
May 4, 2009, the Department issued the second supplemental 
questionnaire to TMI and the Department received a response on May 11, 
2009 (``TMI's 2nd SQR'').
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    \1\ See Notice of Antidumping Duty Orders: Pure Magnesium From 
the People's Republic of China, the Russian Federation and Ukraine, 
60 FR 25691 (May 12, 1995).
    \2\ See Antidumping or Countervailing Duty Order, Finding, or 
Suspended Investigation: Opportunity to Request Administrative 
Review, 73 FR 24532 (May 5, 2008).
    \3\ See Initiation of Antidumping and Countervailing Duty 
Administrative Reviews and Requests for Revocation in Part, 73 FR 
37409 (July 1, 2008).
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    On February 9, 2009, the Department extended the time period for 
completion

[[Page 27091]]

of the preliminary results of this review by 120 days until May 31, 
2009.\4\
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    \4\ See Pure Magnesium from the People's Republic of China: 
Extension of Time for the Preliminary Results of the Antidumping 
Duty Administrative Review, 74 FR 6365 (February 9, 2009).
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    On February 6, 2009, the Department requested that the Office of 
Policy provide a list of surrogate countries for this review.\5\ On 
February 20, 2009, the Office of Policy issued its list of surrogate 
countries.\6\ On February 20, 2009, the Department issued a letter to 
interested parties seeking comments on surrogate country selection and 
surrogate values. On March 6, 2009, Petitioner and TMI submitted 
comments on surrogate country selection (``Petitioner's Surrogate 
Country Selection Letter'' and ``TMI's Surrogate Country Selection 
Letter,'' respectively). On March 20, 2009, Petitioner and TMI 
submitted surrogate value comments (``Petitioner's 3/20/2009 Surrogate 
Value Comments'' and ``TMI's 3/20/2009 Surrogate Value Comments,'' 
respectively). On March 30, 2009, TMI and Petitioner submitted 
additional and rebuttal surrogate value information (``TMI's 3/30/2009 
Surrogate Value Comments'' and ``Petitioner's 3/30/2009 Surrogate Value 
Comments,'' respectively). On April 9, 2009, TMI submitted additional 
rebuttal surrogate value information (``TMI's 4/9/2009 Surrogate Value 
Comments'').
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    \5\ See Memorandum ``Request for Surrogate-Country Selection: 
2007-2008 Administrative Review of the Antidumping Duty Order on 
Pure Magnesium from the People's Republic of China'' (February 6, 
2009)
    \6\ See Memorandum ``Request for Surrogate-Country Selection: 
2007-2008 Administrative Review of the Antidumping Duty Order on 
Pure Magnesium from the People's Republic of China'' (February 20, 
2009) (``Surrogate Country List'').
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    On April 13, 2009, the Department found that Exhibit 5 of the 
Petitioner's 3/20/2009 Surrogate Value Comments did not conform to the 
requirements of 19 CFR 351.301(c)(3) of the Department's regulations, 
which provides for the submission of only ``publicly available 
information to value factors.''\7\ Accordingly, the Department rejected 
this submission.\8\ The Department allowed Petitioner to re-submit its 
surrogate value comments as a public document without business 
proprietary information, and with no substantive changes to the 
document other than to delete or make public the bracketed information 
contained in Exhibit 5 of Petitioner's 3/20/2009 Surrogate Value 
Submission. On April 16, 2009, Petitioner re-submitted its surrogate 
value comments and made public the previously bracketed information 
contained in Exhibit 5 (``Petitioner's 4/16/2009 Surrogate Value 
Comments''). On May 8, 2009, Petitioner submitted comments concerning 
the upcoming preliminary results (``Petitioner's 5/8/2009 Comments 
Concerning the Preliminary Results''). On May 13, 2009, TMI submitted a 
letter, requesting the Department reject Petitioner's 5/8/2009 Comments 
Concerning the Preliminary Results.\9\
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    \7\ See Letter from Robert Bolling to All Interested Parties, 
Re: Antidumping Duty Administrative Review of Pure Magnesium from 
the People's Republic of China, dated February 20, 2009.
    \8\ See Letter from Wendy J. Frankel, Office Director, to 
Stephen Jones, Petitioner's counsel, Re: Rejection of Petitioner's 
3/20/2009 Surrogate Value Submission, dated April 13, 2009.
    \9\ On May 28, 2009, the Department placed a memorandum on the 
file, stating the reasons that the Department would not reject 
Petitioner's 5/8/2009 Comments Concerning the Preliminary Results as 
TMI requested.
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Period of Review

    The POR is May 1, 2007, through April 30, 2008.

Scope of Order

    Merchandise covered by this order is pure magnesium regardless of 
chemistry, form or size, unless expressly excluded from the scope of 
this order. Pure magnesium is a metal or alloy containing by weight 
primarily the element magnesium and produced by decomposing raw 
materials into magnesium metal. Pure primary magnesium is used 
primarily as a chemical in the aluminum alloying, desulfurization, and 
chemical reduction industries. In addition, pure magnesium is used as 
an input in producing magnesium alloy. Pure magnesium encompasses 
products (including, but not limited to, butt ends, stubs, crowns and 
crystals) with the following primary magnesium contents:
    (1) Products that contain at least 99.95% primary magnesium, by 
weight (generally referred to as ``ultra pure'' magnesium);
    (2) Products that contain less than 99.95% but not less than 99.8% 
primary magnesium, by weight (generally referred to as ``pure'' 
magnesium); and
    (3) Products that contain 50% or greater, but less than 99.8% 
primary magnesium, by weight, and that do not conform to ASTM 
specifications for alloy magnesium (generally referred to as ``off-
specification pure'' magnesium).
    ``Off-specification pure'' magnesium is pure primary magnesium 
containing magnesium scrap, secondary magnesium, oxidized magnesium or 
impurities (whether or not intentionally added) that cause the primary 
magnesium content to fall below 99.8% by weight. It generally does not 
contain, individually or in combination, 1.5% or more, by weight, of 
the following alloying elements: aluminum, manganese, zinc, silicon, 
thorium, zirconium and rare earths.
    Excluded from the scope of this order are alloy primary magnesium 
(that meets specifications for alloy magnesium), primary magnesium 
anodes, granular primary magnesium (including turnings, chips and 
powder) having a maximum physical dimension (i.e., length or diameter) 
of one inch or less, secondary magnesium (which has pure primary 
magnesium content of less than 50% by weight), and remelted magnesium 
whose pure primary magnesium content is less than 50% by weight.
    Pure magnesium products covered by this order are currently 
classifiable under Harmonized Tariff Schedule of the United States 
(``HTSUS'') subheadings 8104.11.00, 8104.19.00, 8104.20.00, 8104.30.00, 
8104.90.00, 3824.90.11, 3824.90.19 and 9817.00.90. Although the HTSUS 
subheadings are provided for convenience and customs purposes, our 
written description of the scope is dispositive.

Non-Market Economy Country Status

    The Department has treated the PRC as a non-market economy 
(``NME'') country in all past antidumping duty investigations and 
administrative reviews and continues to do so in this case.\10\ The 
Department has previously examined the PRC's market economy status and 
determined that NME status should continue for the PRC.\11\ In 
accordance with section 771(18)(C)(i) of the Act, any determination 
that a foreign country is an NME country shall remain in effect until 
revoked by the administering authority.\12\ No interested party to this 
proceeding has contested such treatment. Accordingly, we calculated 
normal value (``NV'') in accordance with section 773(c) of the Act, 
which applies to NME countries.
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    \10\ See 771(18)(C) of the Act; see, e.g., Pure Magnesium from 
the People's Republic of China: Final Results of Antidumping Duty 
Administrative Review, 73 FR 76336 (December 16, 2008); and 
Frontseating Service Valves From the People's Republic of China: 
Final Determination of Sales at Less Than Fair Value and Final 
Negative Determination of Critical Circumstances, 74 FR 10886 (March 
13, 2009).
    \11\ See Memorandum from the Office of Policy to David M. 
Spooner, Assistant Secretary for Import Administration, regarding 
the People's Republic of China Status as a Non-Market Economy, dated 
May 15, 2006. This document is available online at: http://ia.ita.doc.gov/download/prc-nme-status/prc-nme-status-memo.pdf.
    \12\ See section 771(18)(c)(i) of the Act.

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[[Page 27092]]

Surrogate Country

    When the Department is investigating imports from an NME country, 
section 773(c)(1) of the Act directs it to base NV on the NME 
producer's factors of production (``FOPs''). The Act further instructs 
that valuation of the FOPs shall be based on the best available 
information in a surrogate market economy country or countries 
considered to be appropriate by the Department.\13\ When valuing the 
FOPs, the Department shall utilize, to the extent possible, the prices 
or costs of FOPs in one or more market economy countries that are: (1) 
at a level of economic development comparable to that of the NME 
country; and (2) significant producers of comparable merchandise.\14\ 
Further, the Department normally values all FOPs in a single surrogate 
country.\15\ The sources of surrogate value are discussed under the 
``Normal Value'' section below and in the Factor Valuation Memorandum, 
which is on file in the Central Records Unit, Room 1117 of the main 
Department building.\16\
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    \13\ See section 773(c)(1) of the Act.
    \14\ See section 773(c)(4) of the Act.
    \15\ See 19 CFR 351.308(c)(2).
    \16\ See Memorandum to the File, Preliminary Results of the 
2007-2008 Administrative Review of the Antidumping Duty Order on 
Pure Magnesium from the People's Republic of China: Surrogate Value 
Memorandum, dated June 1, 2009 (``Factor Valuation Memorandum'').
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    In examining which country to select as its primary surrogate 
country for this proceeding, the Department first determined that 
India, Indonesia, the Philippines, Columbia, Thailand, and Peru are 
countries comparable to the PRC in terms of economic development.\17\ 
In Petitioner's Surrogate Country Selection Letter, Petitioner contends 
that the Department should continue to select India as the surrogate 
country for this administrative review, as it has in previous 
proceedings. Also, Petitioner maintains that to the best of its 
knowledge, there are no magnesium producers currently operating in any 
of the six countries identified in the Surrogate Country Memorandum. 
Petitioner states that Southern Magnesium & Chemicals Ltd. (``Southern 
Magnesium''), which is located in India, has either downsized or ceased 
its magnesium production operations.\18\ Petitioner argues, however, 
that India is a significant producer of aluminum and the Department has 
``routinely determined that aluminum is a product comparable to 
magnesium production.''\19\ Petitioner states that India has five major 
producers of aluminum.\20\ Additionally, Petitioner contends that the 
Department determined that zinc is the only other merchandise that the 
Department had found to be comparable to magnesium,\21\ and India is a 
significant producer of zinc.\22\ Finally, Petitioner contends that 
India is the best available surrogate country for this proceeding 
because India is known to have complete, up-to-date, and reliable 
publicly available information for all raw material factors of 
production. Petitioner states that India is the only potential 
surrogate country that can be a source for surrogate financial ratios 
because India is a significant producer of aluminum and zinc.
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    \17\ See Memorandum to Robert Bolling, Program Manager, From Ron 
Lorentzen, Director, Office of Policy, Re: Administrative Review of 
Pure Magnesium from the People's Republic of China: Request for a 
List of Surrogate Countries, dated December 20, 2008 (``Surrogate 
Country Memorandum'').
    \18\ See 2002 Annual Report of Southern Magnesium, contained in 
Petitioner's Surrogate Country Selection Letter, at 3 and Exhibit 2.
    \19\ See Petitioner's Surrogate Country Selection Letter, at 3, 
citing the Final Results of 2006-2007 Administrative Review of Pure 
Magnesium from the People's Republic of China (December 16, 2008), 
and accompanying Issue and Decision Memorandum at Comment 6.D.
    \20\ See Petitioner's Surrogate Country Selection Letter, at 5, 
citing The Mineral Industry of India - 2006, at Table 2, U.S. 
Geological Survey (``USGS''), contained in Exhibit 3; also, citing 
USGS Minerals Yearbook, Zinc-2006 at Table 16, contained in Exhibit 
4.
    \21\ See Petitioner's Surrogate Country Selection Letter, at 5, 
citing Pure Magnesium From the Russian Federation, 66 FR 49347 
(September 27, 2001), at Comment 1.
    \22\See Petitioner's Surrogate Country Selection, at 5, citing 
USGS Minerals Yearbook, Zinc - 2006, at Table 16, contained in 
Exhibit 4.
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    In TMI's Surrogate Country Selection Letter, TMI contends that 
India is the most appropriate surrogate country for the PRC in this 
review. TMI reiterates the reasons that the Department used in its 
determination to use India as the appropriate surrogate country in the 
06-07 administrative review of pure magnesium from the PRC: (1) India 
is at a level of economic development comparable to the PRC; (2) India 
is a significant producer of comparable merchandise; and (3) the 
Department has reliable data to use from India. Both Petitioner and TMI 
submitted Indian sourced data to value FOPs.
    After evaluating interested parties' comments, the Department has 
determined that India is the appropriate surrogate country to use in 
this review in accordance with section 773(c)(4) of the Act. The 
Department based its decision on the following facts: (1) India is at a 
level of economic development comparable to that of the PRC; (2) India 
is a significant producer of comparable merchandise, i.e., aluminum and 
zinc; and (3) India provides the best opportunity to use quality, 
publicly available data to value the FOPs. On the record of this 
review, we have usable surrogate financial data from India, but no such 
surrogate financial data from any other potential surrogate country. 
Additionally, all the data submitted by both Petitioner and TMI for our 
consideration as potential surrogate values are sourced from India.
    Therefore, because India best represents the experience of 
producers of comparable merchandise operating in a surrogate country, 
we have selected India as the surrogate country and, accordingly, have 
calculated NV using Indian prices to value TMI' FOPs, when available 
and appropriate. We have obtained and relied upon publicly available 
information wherever possible.
    In accordance with 19 CFR 351.301(c)(3)(ii), interested parties may 
submit publicly available information to value the FOPs within 20 days 
after the date of publication of the preliminary determination.\23\
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    \23\ In accordance with 19 CFR 351.301(c)(1), for the final 
determination of this review, interested parties may submit factual 
information to rebut, clarify, or correct factual information 
submitted by an interested party less than ten days before, on, or 
after the applicable deadline for submission of such factual 
information. However, the Department notes that 19 CFR 351.301(c)(1) 
permits new information only insofar as it rebuts, clarifies, or 
corrects information recently placed on the record. The Department 
generally cannot accept the submission of additional, previously 
absent-from-the-record alternative SV information pursuant to 19CFR 
351.301(c)(1). See Glycine from the People's Republic of China: 
Final Results of Antidumping Duty Administrative Review and Final 
Rescission, in Part, 72 FR 58809 (October 17, 2007), and 
accompanying Issues and Decision Memorandum at Comment 2.
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Separate Rates

    In proceedings involving NME countries, the Department has a 
rebuttable presumption that all companies within the country are 
subject to government control and thus should be assessed a single 
antidumping duty rate. It is the Department's policy to assign all 
exporters of subject merchandise in an NME country this single rate 
unless an exporter can demonstrate that it is sufficiently independent 
so as to be entitled to a separate rate. Exporters can demonstrate this 
independence through the absence of both de jure and de facto 
governmental control over export activities. The Department analyzes 
each entity exporting the subject merchandise under a test arising from 
the Notice of Final Determination of Sales at Less Than Fair value: 
Sparklers from the People's Republic of China, 56 FR 20588 (May 6, 
1991) (``Sparklers''),

[[Page 27093]]

as further developed in Notice of Final Determination of Sales at Less 
Than Fair Value: Silicon Carbide from the People's Republic of China, 
59 FR 22585 (May 2, 1994) (``Silicon Carbide''). However, if the 
Department determines that a company is wholly foreign-owned or located 
in a market economy, then a separate rate analysis is not necessary to 
determine whether it is independent from government control.

Separate Rate Recipients

    TMI is the only respondent in this administrative review. TMI 
reported that it is a wholly Chinese-owned company. Therefore, the 
Department must analyze whether it can demonstrate the absence of both 
de jure and de facto government control over export activities.

a. Absence of De Jure Control

    The Department considers the following de jure criteria in 
determining whether an individual company may be granted a separate 
rate: (1) an absence of restrictive stipulations associated with an 
individual exporter's business and export licenses; (2) any legislative 
enactments decentralizing control of companies; and (3) other formal 
measures by the government decentralizing control of companies.\24\
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    \24\ See Sparklers, 56 FR at 20589.
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    The evidence provided by TMI supports a preliminary finding of de 
jure absence of government control based on the following: (1) an 
absence of restrictive stipulations associated with its business and 
export licenses; (2) there are applicable legislative enactments 
decentralizing control of companies; and (3) and there are formal 
measures by the government decentralizing control of companies.\25\
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    \25\ See Sparklers, 56 FR at 20589.
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b. Absence of De Facto Control

    Typically the Department considers four factors in evaluating 
whether each respondent is subject to de facto government control of 
its export functions: (1) whether the export prices are set by or are 
subject to the approval of a government agency; (2) whether the 
respondent has authority to negotiate and sign contracts and other 
agreements; (3) whether the respondent has autonomy from the government 
in making decisions regarding the selection of management; and (4) 
whether the respondent retains the proceeds of its export sales and 
makes independent decisions regarding disposition of profits or 
financing of losses.\26\ The Department has determined that an analysis 
of de facto control is critical in determining whether respondents are, 
in fact, subject to a degree of governmental control which would 
preclude the Department from assigning separate rates.
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    \26\ See Silicon Carbide, 59 FR at 22586-87; see also Notice of 
Final Determination of Sales at Less Than Fair Value: Furfuryl 
Alcohol From the People's Republic of China, 60 FR 22544, 22545 (May 
8, 1995).
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    The evidence provided by TMI supports a preliminary finding of de 
facto absence of government control based on the following: (1) the 
absence of evidence that the export prices are set by or are subject to 
the approval of a government agency;\27\ (2) the respondent has 
authority to negotiate and sign contracts and other agreements;\28\ (3) 
the respondent has autonomy from the government in making decisions 
regarding the selection of management\29\ and (4) the respondent 
retains the proceeds of its export sales and makes independent 
decisions regarding disposition of profits or financing of losses.\30\
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    \27\ See TMI's AQR, at 7; see also the contract and the purchase 
order between TMI and a U.S. Customer contained in TMI's AQR at 
Exhibit A-6.
    \28\ See the purchase contracts between TMI and its producers 
contained in TMI's 1st SAQR at Exhibit SA-6A and Exhibit SA-6B.
    \29\ See TMI's AQR at 8-9.
    \30\ See TMI's AQR at 8-9.
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    Therefore, the evidence placed on the record of this review by TMI 
demonstrates an absence of de jure and de facto government control with 
respect to TMI's exports of the merchandise under review, in accordance 
with the criteria identified in Sparklers and Silicon Carbide. 
Accordingly, we have determined that TMI has demonstrated its 
eligibility for a separate rate.

Fair Value Comparisons

    To determine whether sales of pure magnesium to the United States 
by TMI were made at less than fair value (``LTFV''), we compared Export 
Price (``EP'') to NV, as described in the ``Export Price'' and ``Normal 
Value'' sections of this notice.

Export Price

    In accordance with section 772(a) of the Act, EP is the price at 
which the subject merchandise is first sold (or agreed to be sold) 
before the date of importation by the producer or exporter of the 
subject merchandise outside of the United States to an unaffiliated 
purchaser in the United States or to an unaffiliated purchaser for 
exportation to the United States, as adjusted under section 772(c) of 
the Act. In accordance with section 772(a) of the Act, we have used EP 
for TMI's U.S. sales because the subject merchandise was sold directly 
to the unaffiliated customers in the United States prior to importation 
and because Constructed Export Price was not otherwise warranted.
    We have based the EP on delivered prices to unaffiliated purchasers 
in the United States. In accordance with section 772(c)(2)(A) of the 
Act, we have made deductions from the starting price for movement 
expenses, including expenses for foreign inland freight from the plant 
to the port of exportation, domestic brokerage and handling, 
international freight, marine insurance, brokerage and handling 
expenses incurred in the U.S. and the U.S. customs duty. No other 
adjustments to EP were reported or claimed.\31\
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    \31\ See Memorandum ``Analysis for the Preliminary Results of 
Pure Magnesium from the People's Republic of China: Tianjin 
Magnesium International, Co. Ltd.'' (``TMI's Analysis Memorandum''), 
dated June 1, 2009.
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Normal Value

    Section 773(c)(1) of the Act provides that, the Department shall 
determine NV using an FOP methodology if the the merchandise is 
exported from an NME country and the Department finds available 
information does not permit the calculation of NV using home-market 
prices, third-country prices, or constructed value under section 773(a) 
of the Act. When determining NV in an NME context, the Department will 
base NV on FOPs because the presence of government controls on various 
aspects of these economies renders price comparisons and the 
calculation of production costs invalid under our normal methodologies. 
The Department's questionnaire requires that TMI provide information 
regarding the weighted-average FOPs across all of the company's plants 
that produce the subject merchandise, not just the FOPs from a single 
plant. This methodology ensures that the Department's calculations are 
as accurate as possible.\32\
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    \32\ See, e.g., Final Determination of Sales at Less Than Fair 
Value and Critical Circumstances: Certain Malleable Iron Pipe 
Fittings From the People's Republic of China, 68 FR 61395 (October 
28, 2003), and accompanying Issue and Decision Memorandum at Comment 
19.
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    In accordance with 19 CFR 351.408(c)(1), the Department will 
normally use publicly available information to find an appropriate SV 
to value FOPs, but when a producer sources an input from a market 
economy and pays for it in market-economy currency, the Department may 
value the factor using the actual price paid for the input.\33\ TMI 
reported that

[[Page 27094]]

it did not purchase any inputs from market economy suppliers for the 
production of the subject merchandise.\34\
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    \33\ See 19 CFR 351.408(c)(1); see also Shakeproof Assembly 
Components Div of Ill v. United States, 268 F. 3d 1376, 1382-1383 
(Fed. Cir. 2001) (affirming the Department's use of market-based 
prices to value certain FOPs).
    \34\ See TMI's DQR at D-5.
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    We calculated NV based on FOPs in accordance with section 773(c)(3) 
and (4) of the Act and 19 CFR 351.408(c). The FOPs include but are not 
limited to: (1) hours of labor required; (2) quantities of raw 
materials employed; (3) amounts of energy and other utilities consumed; 
and (4) representative capital costs. The Department used FOPs reported 
by TMI for materials, energy, labor, by-products, and packing.
    TMI stated that two by-products, i.e., cement clinker and waste 
magnesium, are generated from the production process of subject 
merchandise,\35\ and provided the Department with the receipts of sales 
of cement clinker and waste magnesium generated during the POR.\36\ 
Therefore, for these preliminary results, we have granted TMI's 
requested by-product offsets for cement clinker and waste magnesium in 
our NV calculation.\37\
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    \35\ Id. at D-13.
    \36\ See TMI 1st SDQR at Exhibit 5.
    \37\ For further discussion of TMI's by-product offsets, see 
TMI's Analysis Memorandum and Factor Valuation Memorandum.
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Factor Valuations

    In accordance with section 773(c) of the Act, the Department 
calculated NV based on FOPs reported by TMI for the POR. To calculate 
NV, the Department multiplied the reported per-unit factor consumption 
quantities by publicly available Indian surrogate values. In selecting 
the surrogate values, the Department considered the quality, 
specificity, and contemporaneity of the data. The Department adjusted 
input prices by including freight costs to make them delivered prices, 
as appropriate. Specifically, the Department added to Indian import 
surrogate values a surrogate freight cost using the shorter of the 
reported distance from the domestic supplier to the factory or the 
distance from the nearest seaport to the factory of production. This 
adjustment is in accordance with the decision of the U.S. Court of 
Appeals for the Federal Circuit in Sigma Corp. v. United States, 117 
F.3d 1401, 1407-08 (Fed. Cir.1997). A detailed description of all 
surrogate values used to value TMI's reported FOPs can be found in the 
Factor Valuation Memorandum.
    The Department calculated surrogate values for the majority of 
reported FOPs purchased from NME sources using the contemporaneous, 
weighted-average unit import value derived from the Monthly Statistics 
of the Foreign Trade of India, as published by the Directorate General 
of Commercial Intelligence and Statistics of the Ministry of Commerce 
and Industry, Government of India in the World Trade Atlas, available 
at http://www.gtis.com/wta.htm (``WTA Indian Import Statistics'').\38\ 
WTA Indian Import Statistics were reported in rupees and are 
contemporaneous with the POR to calculate surrogate values for TMI's 
material inputs. In selecting the best available information for 
valuing FOPs in accordance with section 773(c)(1) of the Act, the 
Department's practice is to select, to the extent practicable, 
surrogate values which are non-export average values, most 
contemporaneous with the POI, product-specific, and tax-exclusive.\39\
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    \38\  See Factor Valuation Memorandum at attachment 1.
    \39\ See, e.g., Notice of Preliminary Determination of Sales at 
Less Than Fair Value, Negative Preliminary Determination of Critical 
Circumstances and Postponement of Final Determination: Certain 
Frozen and Canned Warmwater Shrimp From the Socialist Republic of 
Vietnam, 69 FR 42672, 42682 (July 16, 2004), unchanged in Final 
Determination of Sales at Less Than Fair Value: Certain Frozen and 
Canned Warmwater Shrimp from the Socialist Republic of Vietnam, 69 
FR 71005 (December 8, 2004).
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    In those instances where the Department could not obtain publicly 
available information contemporaneous with the POR with which to value 
FOPs, the Department adjusted the surrogate values using the Indian 
Wholesale Price Index (``WPI''), as published in the International 
Financial Statistics of the International Monetary Fund.\40\
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    \40\ See Factor Valuation Memorandum at Attachment 2.
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    Furthermore, with regard to Indian import-based surrogate values, 
we have disregarded prices that we have reason to believe or suspect 
may be subsidized, such as those from Indonesia, South Korea, and 
Thailand. We have found in other proceedings that these countries 
maintain broadly available, non-industry-specific export subsidies and, 
therefore, it is reasonable to infer that all exports to all markets 
from these countries may be subsidized.\41\ We are also guided by the 
statute's legislative history that explains that it is not necessary to 
conduct a formal investigation to ensure that such prices are not 
subsidized.\42\ Rather, the Department was instructed by Congress to 
base its decision on information that is available to it at the time it 
is making its determination. Therefore, we have not used prices from 
these countries in calculating the Indian import-based surrogate 
values.
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    \41\ See Certain Frozen Fish Fillets from the Socialist Republic 
of Vietnam: Notice of Preliminary Results and Preliminary Partial 
Rescission of Antidumping Duty Administrative Review, 70 FR 54007, 
54011 (September 13, 2005), unchanged in Certain Frozen Fish Fillets 
from the Socialist Republic of Vietnam: Final Results of the First 
Administrative Review, 71 FR 14170 (March 21, 2006); and China 
National Machinery Import & Export Corporation v. United States, 293 
F. Supp. 2d 1334 (CIT 2003), affirmed 104 Fed. Appx. 183 (Fed. Cir. 
2004).
    \42\ See H.R. Rep. No. 100-576 at 590 (1988).
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    The Department used WTA Indian Import Statistics to calculate 
surrogate values for raw materials, including ferrosilicon, fluorite, 
sulphur powder and sulfuric acid and for packing materials, including 
steel bands and plastic bags. For dolomite, in reviewing the record 
evidence of this proceeding, we continue to find, as we did in the 
previous segments of this proceeding, that it is reasonable to conclude 
that WTA data represent prices of imported dolomite in the high-end 
value-added product range while the dolomite used to produce subject 
merchandise is the high-bulk, low-value commodity.\43\ Therefore, we 
have determined to value dolomite using the purchase price paid by Tata 
Sponge Iron Ltd. (``Tata Sponge Iron''), an Indian producer of sponge 
iron, as recorded in Tata Sponge Iron's 2007-2008 financial statements. 
We have determined not to use the purchase price paid by Nova Iron & 
Steel Limited (``Nova Iron & Steel''), another Indian producer of iron 
and steel, because the company is registered as a Sick Industrial 
Company, as recorded in Nova Iron & Steel's 2007-2008 financial 
statements.\44\ Finally, we have determined not to use the purchase 
price from Tata Steel because this represents an average price for both 
dolomite and limestone.\45\
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    \43\ See Pure Magnesium from the People's Republic of China: 
Final Results of 2006-2007Antidumping Duty Administrative Review, 73 
FR 76336 (December 16, 2008), and accompanying Issues and Decision 
Memorandum at Comment 1.
    \44\ See 16th Annual Report 2007-2008, Nova Iron & Steel 
Limited, at 14 contained in TMI's Initial Surrogate Value Comments 
at Exhibit SV-2D.
    \45\ See 101st Annual Report 2007-2008, Tata Steel Limited, at 
183 contained in Petitioner's 1st Rebuttal Surrogate Value Comments 
at Exhibit SV-1.
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    We have determined to value TMI's by-product of clinker using the 
purchase price paid by Madras Cements Ltd. (``Madras Cements''), an 
Indian producer of cement. Our examination of the record evidence, 
including the description of TMI's production process, leads us to 
preliminarily conclude that the by-product clinker, like the dolomite 
from which it is generated, is also a high-bulk, low-value commodity, 
and that WTA Indian Import Statistics would similarly be inappropriate 
to value this material.

[[Page 27095]]

Accordingly, and to be consistent with the valuation of dolomite, we 
have valued this by-product using the purchase price paid by Madras 
Cements.
    We valued TMI's by-product of waste magnesium using WTA Indian 
Import Statistics, in part, because, unlike the case for dolomite and 
clinker, there is no domestic purchase price for waste magnesium on the 
record. We will continue to analyze TMI's waste magnesium to determine 
the best information available to use for the final results.
    We valued flux No.2, which consists of magnesium chloride, 
potassium chloride and sodium chloride, using data from Chemical 
Weekly. We consider both Chemical Weekly and WTA Indian Import 
Statistics reliable sources that the Department has used in past cases 
to value chemical component inputs. In the instant case, however, we 
have determined that Chemical Weekly is the best information available 
for valuing magnesium chloride because the quantity of the total 
imports of magnesium chloride in the WTA Indian Import Statistics is 
very small and thus does not appear to represent commercial quantities.
    We valued brokerage and handling using a simple average of the 
brokerage and handling costs that were reported in public submissions 
that were filed in three antidumping duty cases. Specifically, we 
averaged the public brokerage and handling expenses reported by Navneet 
Publications (India) Ltd. in the 2007-2008 administrative review of 
certain lined paper products from India, Essar Steel Limited in the 
2006-2007 antidumping duty administrative review of hot-rolled carbon 
steel flat products from India, and Himalya International Ltd. in the 
2005-2006 administrative review of certain preserved mushrooms from 
India. We inflated the brokerage and handling rate using the 
appropriate WPI inflator.
    For direct labor, indirect labor, and packing labor, consistent 
with 19 CFR 351.408(c)(3), the Department used the PRC regression-based 
wage rate as reported on Import Administration's website.\46\ Because 
this regression-based wage rate does not separate the labor rates into 
different skill levels or types of labor, the Department has applied 
the same wage rate to all skill levels and types of labor reported by 
TMI. If the NME wage rates are updated by the Department prior to 
issuance of the final determination, we will use the updated wage rate 
in the final results.
---------------------------------------------------------------------------

    \46\ See Expected Wages of Selected NME Countries, revised in 
May 2008, available at http://ia.ita.doc.gov/wages. The source of 
these wage-rate data is the Yearbook of Labour Statistics 2006, ILO 
(Geneva: 2006), Chapter 5B: Wages in Manufacturing. The years of the 
reported wage rates are from 2004 and 2005.
---------------------------------------------------------------------------

    We valued electricity using price data for small, medium, and large 
industries, as published
    by the Central Electricity Authority of the Government of India in 
its publication titled ``Electricity Tariff & Duty and Average Rates of 
Electricity Supply in India,'' dated July 2006. These electricity rates 
represent actual country-wide, publicly-available information on tax-
exclusive electricity rates charged to industries in India.
    We valued truck freight expenses using an Indian per-unit average 
rate calculated from data on the following Web site http://www.infobanc.com/logistics/logtruck.htm. The logistics section of this 
Web site contains inland freight truck rates between many large Indian 
cities. Since this rate is not contemporaneous with the POR we deflated 
the rate using WPI.
    Since TMI reports using non-coking coal with useful heat value 
(``UHV'') of 5500 kcal/kg,\47\ we valued steam coal using Teri Energy 
Data Directory & Yearbook (``TERI Data''), which categorizes non-coking 
coal into different grades from A to G based on UHV and the selling 
prices for categories B and C of non-coking coal reported by Coal India 
Ltd., which we retrieved from its website on May 22, 2009.
---------------------------------------------------------------------------

    \47\ See TMI's DQR at D-12.
---------------------------------------------------------------------------

    We valued marine insurance using the price quote retrieved from 
http://www.rjgconsultants.com/163.html, a market-economy provider of 
marine insurance.
    Section 351.408(c)(4) of the Department's regulations directs the 
Department to value overhead, general and administrative expenses 
(``SG&A''), and profit using non-proprietary information gathered from 
producers of identical or comparable merchandise in the surrogate 
country. In this proceeding, Petitioners and TMI placed the 2007-2008 
financial statements on the record from nine Indian companies: Madras 
Aluminum Company Ltd. (``Malco''), Hindalco Industries Limited 
(``Hindalco''), National Aluminium Company Limited (``Nalco''), 
Hindustan Zinc Limited (``Hindustan Zinc''), Binani Zinc (``Binani 
Zinc''), Sudal Industries Ltd. (``Sudal''), Centure Extrusions Ltd. 
(``Century''), Bhoruka Aluminum (``Bhoruka'') and Man Aluminum Ltd. 
(``Man''). However, we have preliminarily determined that none of 
financial statements on the record is usable for various reasons, as 
explained in detail below. Therefore, as the best available 
information, we have used Malco's 2006-2007 audited financial 
statements, which we used in the 2006-2007 administrative review.\48\
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    \48\ See, e.g., Notice of Final Determination of Sales at Less 
Than Fair Value: Pure Magnesium in Granular Form from the People's 
Republic of China, 66 FR 49345 (September 27, 2001) (``Granular 
Magnesium'').
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    We have determined not to use the 2007-2008 financial statements of 
Malco because they are incomplete.\49\ We have determined not to rely 
on the 2007-2008 financial statements of Hindalco because they indicate 
that Hindalco received ``Export and Other Incentives'' i.e., Duty Free 
Import Entitlement Scheme (``EPCG Scheme'') under ``Operating 
Revenues.''\50\ Similarly, Nalco's financial statements indicate that 
Nalco received ``Export Incentives'' under Duty Entitlement Pass Book 
(``DEPB Premium'') as ``Other Income.''\51\ Also, we have determined 
not to use the 2007-2008 financial statements of Binani Zinc because it 
too made use of the DEPB Premium.\52\ India's EPCG Scheme and DEPB 
Premiums each have been found by the Department to provide a 
countervailable subsidy.\53\ Consistent with the Department practice, 
we do not use financial statements of a company we have reason to 
believe or suspect may have received subsidies, because financial 
ratios derived from that company's financial statements do not 
constitute the best available information with which to value financial 
ratios.\54\
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    \49\ The 2007-2008 financial statements of Malco are missing 
schedules for ``turnover'' and ``other income.'' The Department does 
not use incomplete financial statements. See Frontseating Service 
Valves From the People's Republic of China, 74 FR 10886 (March 13, 
2009), and accompanying Issues and Decision Memorandum at Comment 1.
    \50\ See Annual Report 2007-2008, Hindalco, at 94 contained in 
Petitioner's 4/16/2009 Surrogate Value Comments at Exhibit 8.
    \51\ See 27th Annual Report 2007-2008, Nalco, at 71 contained in 
Petitioner's 4/16/2009 Surrogate Value Comments at Exhibit 9.
    \52\ See Annual Report 2007-2008, Binani Zic, at 24 contained in 
Petitioner's 4/16/2009 Surrogate Value Comments at Exhibit 12.
    \53\ See, e.g., Certain Iron-Metal Castings From India: 
Preliminary Results and Partial Rescission of Countervailing Duty 
Administrative Review, 64 FR 61592 (November 12, 1999); unchanged in 
Certain Iron-Metal Castings From India: Final Results of 
Countervailing Duty Administrative Review 65 FR 31515 (May 18, 
2000); see also http://ia.ita.doc.gov/esel/eselframes.html and 
Notice of Final Affirmative Countervailing Duty Determination and 
Final Negative Critical Circumstances Determination: Certain Lined 
Paper Products from India, 71 FR 45034 (August 8, 2006), and 
accompanying Issues and Decision Memorandum at ``Benchmarks for 
Loans and Discount Rate.''
    \54\  See Freshwater Crawfish Tail Meat from the People's 
Republic of China: Notice of Final Results And Rescission, In Part, 
of 2004/2005 Antidumping Duty Administrative and New Shipper 
Reviews, 72 FR 19174 (April 17, 2007) (``Crawfish from the PRC''), 
and accompanying Issues and Decision Memorandum at Comment 1.

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[[Page 27096]]

    Additionally, we have determined not to use the 2007-2008 financial 
statements of Hindustan Zinc because Hindustan Zinc has four captive 
mines, which indicates it is an integrated producer and so would not 
accurately reflect TMI's production. Furthermore, we have determined 
not use the 2007-2008 financial statements of Sudal, Century, Bhoruka 
and Man because we find that the production of these companies is not 
comparable to TMI's. Record evidence shows that these companies are 
secondary aluminum extrusion manufacturers that buy aluminum metals 
from primary producers or alternatively import metal and manufacture 
aluminum extrusions. In contrast, TMI's producers are producers of 
primary pure magnesium that extract magnesium from dolomite rocks 
through an electrolytic process. Century reports that it is an 
important secondary aluminum extrusion manufacturer in India. Sudal, 
Bhoruka and Man utilize aluminum ingots, aluminum billets and/or 
aluminum scrap and aluminum alloy as raw materials.\55\ Since TMI's 
producers and these secondary aluminum extrusion manufacturers start 
their production processes at different stages, we have determined not 
to include the financial data from these secondary aluminum extrusion 
manufacturers in our surrogate financial ratio calculation.
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    \55\ See Annual Report 2007-2008, Century, at 16 contained in 
TMI's 3/20/2009 Surrogate Value Comments at Exhibit 13B. See also 
29th Annual Report 2007-2008, Sudal, at 29 contained in TMI's 3/20/
2009 Surrogate Value Comments at Exhibit 13A. See also 28th Annual 
Report 2007-2008, Bhoruka, at 35 contained in TMI's 3/20/2009 
Surrogate Value Comments at Exhibit 13C. See also Annual Report 
2007-2008, Man, at 30 contained in TMI's 3/20/2009 Surrogate Value 
Comments at Exhibit 13D.
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    For a complete listing of all the inputs and a detailed discussion 
about our surrogate value selections, see Factor Valuation Memorandum.

Currency Conversion

    The Department made currency conversions into U.S. dollars, in 
accordance with section 773A(a) of the Act, based on the exchange rates 
in effect as certified by the Federal Reserve Bank on the dates of the 
U.S. sales.

Verification

    As provided in section 782(i)(3) of the Act, we intend to verify 
the information from TMI upon which we will rely in making our final 
determination.

Weighted-Average Dumping Margins

    The preliminary weighted-average dumping margin is as follows:

                       Pure Magnesium from the PRC
------------------------------------------------------------------------
                                                       Weighted-Average
                      Exporter                              Margin
                                                         (percentage)
------------------------------------------------------------------------
Tianjin Magnesium International Co. Ltd.............                9.1%
------------------------------------------------------------------------

Disclosure

    The Department will disclose calculations performed for these 
preliminary results to the parties within five days of the date of 
publication of this notice in accordance with 19 CFR 351.224(b). Any 
interested party may request a hearing within 30 days of publication of 
these preliminary results.\56\ If a hearing is requested, the 
Department will announce the hearing schedule at a later date. 
Interested parties may submit case briefs and/or written comments no 
later than seven days after the release of the verification report 
issued in this review.\57\ Rebuttal briefs and rebuttals to written 
comments, limited to issues raised in such briefs or comments, may be 
filed no later than five days after the time limit for filing the case 
briefs.\58\ Further, we request that parties submitting written 
comments provide the Department with an additional copy of those 
comments on diskette or CD ROM. The Department intends to issue the 
final results of this administrative review, which will include the 
results of its analysis of issues raised in any comments, and at a 
hearing, within 120 days of publication of these preliminary results, 
pursuant to section 751(a)(3)(A) of the Act.
---------------------------------------------------------------------------

    \56\ See 19 CFR 351.310(c).
    \57\ See 19 CFR 351.309(c)(ii).
    \58\ See 19 CFR 351.309(d).
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Assessment Rates

    The Department will determine, and CBP shall assess, antidumping 
duties on all appropriate entries of subject merchandise in accordance 
with the final results of this review. For assessment purposes, we 
calculated importer- or customer specific assessment rates for 
merchandise subject to this review.\59\ We calculated an ad valorem 
rate for each importer or customer by dividing the total dumping 
margins for reviewed sales to that party by the total entered values 
associated with those transactions. For duty-assessment rates 
calculated on this basis, we will direct CBP to assess the resulting ad 
valorem rate against the entered customs values for the subject 
merchandise. Where appropriate, we calculated a per-unit rate for each 
importer or customer by dividing the total dumping margins for reviewed 
sales to that party by the total sales quantity associated with those 
transactions. For duty-assessment rates calculated on this basis, we 
will direct CBP to assess the resulting per-unit rate against the 
entered quantity of the subject merchandise. Where an importer- (or 
customer-) specific assessment rate is de minimis (i.e., less than 0.50 
percent) in accordance with the requirement of 19 CFR 351.106)c)(2), 
the Department will instruct CBP to assess that importer's (or 
customer's) entries of subject merchandise without regard to 
antidumping duties. We intend to instruct CBP to liquidate entries 
containing subject merchandise exported by the PRC-wide entity at the 
PRC-wide rate we determine in the final results of this review. The 
Department intends to issue appropriate assessment instructions 
directly to CBP 15 days after publication of the final results of this 
review.
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    \59\ See 19 CFR, 351.212(b)(c).
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Cash Deposit Requirements

    The following cash deposit requirements will be effective upon 
publication of the final results of this administrative review for 
shipments of the subject merchandise from the PRC entered, or withdrawn 
from warehouse, for consumption on or after the publication date, as 
provided by sections 751(a)(2)(C) of the Act: (1) for TMI, which has a 
separate rate, the cash deposit rate will be that established in the 
final results of this review (except, if the rate is zero or de 
minimis, zero cash deposit will be required); (2) for previously 
investigated or reviewed PRC and non-PRC exporters not listed above 
that received a separate rate in a prior segment of this proceeding the 
cash deposit rate will continue to be the exporter-specific rate; (3) 
for all PRC exporters of subject merchandise that have not been found 
to be entitled to a separate rate, the cash deposit rate will be the 
PRC-wide rate of 108.26 percent; and (4) for all non-PRC exporters of 
subject merchandise which have not received their own rate, the cash 
deposit rate will be the rate applicable to the PRC exporter that 
supplied that non-PRC exporter. These deposit requirements, when 
imposed, shall remain in effect until further notice.

Notification to Importers

    This notice serves as a preliminary reminder to importers of their 
responsibility under 19 CFR

[[Page 27097]]

351.402(f)(2) to file a certificate regarding the reimbursement of 
antidumping duties prior to liquidation of the relevant entries during 
this review period. Failure to comply with this requirement could 
result in the Secretary's presumption that reimbursement of antidumping 
duties occurred and the subsequent assessment of double antidumping 
duties.
    This administrative review and notice are in accordance with 
sections 751(a)(1) and 777(i) of the Act and 19 CFR 351.213.

    Dated: June 1, 2009.
Ronald K. Lorentzen,
Acting Assistant Secretary for Import Administration.
[FR Doc. E9-13344 Filed 6-5-09; 8:45 am]
BILLING CODE 3510-DS-S