[Federal Register Volume 63, Number 49 (Friday, March 13, 1998)]
[Notices]
[Pages 12440-12449]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-6551]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-570-840]


Manganese Metal From the People's Republic of China; Final 
Results and Partial Rescission of Antidumping Duty Administrative 
Review

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.

ACTION: Notice of final results of the administrative review of the 
antidumping duty order on manganese

[[Page 12441]]

metal from the People's Republic of China.

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SUMMARY: On Friday November 7, 1997 the Department of Commerce 
published the preliminary results of its administrative review of the 
antidumping duty order on manganese metal from the People's Republic of 
China. The period of review is June 14, 1995 through January 31, 1997.
    Based on our analysis of comments received, we have made changes to 
the margins calculated in the preliminary results, including 
corrections of certain clerical errors. Therefore, the final results 
differ from the preliminary results. The final weighted-average dumping 
margins are listed below in the section entitled ``Final Results of 
Review.''
    We have determined that sales have been made below normal value 
during the period of review. Accordingly, we will instruct the US 
Customs Service to assess antidumping duties based on the difference 
between export price and normal value.

EFFECTIVE DATE: March 13, 1998.

FOR FURTHER INFORMATION CONTACT: Greg Campbell or Cynthia Thirumalai, 
Antidumping/Countervailing Duty Enforcement, Group I, Office 1, Import 
Administration, International Trade Administration, U.S. Department of 
Commerce, 14th Street and Constitution Avenue NW., Washington, DC 
20230; telephone (202) 482-2239 or (202) 482-4087, respectively.

APPLICABLE STATUTE AND REGULATIONS: Unless otherwise indicated, all 
citations to the Tariff Act of 1930, as amended (the ``Act''), are 
references to the provisions effective January 1, 1995, the effective 
date of the amendments made to the Act by the Uruguay Round Agreements 
Act (``URAA''). In addition, all references to the Department's 
regulations are to 19 CFR Part 353 (April 1997).

SUPPLEMENTARY INFORMATION:

Background

    On November 7, 1997, the Department of Commerce (``the 
Department'') published in the Federal Register the preliminary results 
of the administrative review of the antidumping duty order on manganese 
metal from the People's Republic of China (``PRC''). See Manganese 
Metal from the People's Republic of China; Preliminary Results of 
Antidumping Duty Administrative Review, 62 FR 60226 (November 7, 1997) 
(``Preliminary Results''). We gave interested parties an opportunity to 
comment on our preliminary results and held a public hearing on 
November 19, 1997. The following parties submitted comments: Elkem 
Metals Company and Kerr-McGee Chemical Corporation (together comprising 
the ``petitioners''), and China Hunan International Economic 
Development Corporation (``HIED'') and China Metallurgical Import & 
Export Hunan Corporation/Hunan Nonferrous Metals Import & Export 
Associated Corporation (``CMIECHN/CNIECHN'') (together comprising the 
``respondents''). We have conducted this administrative review in 
accordance with section 751(a)(1) of the Act and 19 CFR 353.22.

Scope of Review

    The merchandise covered by this review is manganese metal, which is 
composed principally, by weight, of manganese, but also contains some 
impurities such as carbon, sulfur, phosphorous, iron and silicon. 
Manganese metal contains by weight not less than 95 percent manganese. 
All compositions, forms and sizes of manganese metal are included 
within the scope of this administrative review, including metal flake, 
powder, compressed powder, and fines. The subject merchandise is 
currently classifiable under subheadings 8111.00.45.00 and 
8111.00.60.00 of the Harmonized Tariff Schedule of the United States 
(``HTSUS''). Although the HTSUS subheadings are provided for 
convenience and customs purposes, the written description of the scope 
of this proceeding is dispositive.

Rescission

    The Department received responses from Minmetals Precious & Rare 
Minerals Import & Export Co. (``Minmetals'') and China National 
Electronics Import and Export Hunan Company (``CEIEC'') indicating that 
they had not shipped any subject merchandise during the POR. We 
confirmed with the US Customs Service that this was correct. Consistent 
with our administrative practice, therefore, we have rescinded our 
review of Minmetals and CEIEC. See Certain Cased Pencils from the 
People's Republic of China; Preliminary Results and Partial Rescission 
of Antidumping Administrative Review, 62 FR 1734 (January 13, 1997) 
(rescinded review in part with respect to the respondents which the 
Department determined had made no shipments of subject merchandise 
during the POR). See also 19 CFR 351.213(d)(3), 62 FR 27296 (May 19, 
1997) (although this review is not governed by these new regulations, 
they do reflect current Department practice.).

Separate Rates

    It is the Department's standard policy to assign all exporters of 
the merchandise subject to review in non-market economy (``NME'') 
countries a single rate unless an exporter can demonstrate an absence 
of government control, both in law and in fact, with respect to 
exports. To establish whether an exporter is sufficiently independent 
of government control to be entitled to a separate rate, the Department 
analyzes the exporter in light of the criteria established in the Final 
Determination of Sales at Less Than Fair Value: Sparklers from the 
People's Republic of China, 56 FR 20588, (May 6, 1991) (``Sparklers''), 
as amplified in the 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''). Evidence supporting, though not 
requiring, a finding of de jure absence of government control over 
export activities includes: (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) any other formal measures by the government decentralizing control 
of companies. See Sparklers at 20589. A de facto analysis of absence of 
government control over exports is based on four factors--whether the 
respondent: (1) sets its own export prices independent from the 
government and other exporters; (2) can retain the proceeds from its 
export sales; (3) has the authority to negotiate and sign contracts; 
and (4) has autonomy from the government regarding the selection of 
management. See Silicon Carbide at 22587, and Sparklers at 20589.
    In our final determination in the investigation of sales at less 
than fair value (``LTFV''), the Department determined that there was de 
jure and de facto absence of government control of each company's 
export activities and determined that each company warranted a company-
specific dumping margin. See Final Determination of Sales at Less Than 
Fair Value: Manganese Metal from the People's Republic of China, 60 FR 
56045 (February 6, 1996) (``LTFV investigation''). For this period of 
review, HIED and CMIECHN/CNIECHN have responded to the Department's 
request for information regarding separate rates. We have found that 
the evidence on the record is consistent with the final determination 
in the LTFV investigation and continues to demonstrate an absence of 
government

[[Page 12442]]

control, both in law and in fact, with respect to their exports, in 
accordance with the criteria identified in Sparklers and Silicon 
Carbide.

Export Price

    For sales made by HIED and CMIECHN/CNIECHN to the United States, we 
calculated an export price, in accordance with section 772(a) of the 
Act, because the subject merchandise was sold to unrelated purchasers 
in the United States prior to importation into the United States and a 
constructed export price (``CEP'') methodology was not warranted.
    We calculated the export price based on the price to unrelated 
purchasers in the United States. Where appropriate we deducted an 
amount for foreign inland freight, ocean freight, and marine insurance. 
Generally, these costs were valued in the surrogate country. However, 
where transportation services were purchased from market economy 
carriers and paid for in market economy currency, we used the cost 
actually incurred by the exporter.

Normal Value

1. Non-Market Economy Status

    For companies located in NME countries, section 773(c) (1) of the 
Act provides that the Department shall determine normal value (``NV'') 
using a factors of production methodology if (1) the merchandise is 
exported from an NME country, and (2) the 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.
    The Department has treated the PRC as an NME country in all 
previous antidumping cases. In accordance with section 771(18)(C)(i) of 
the Act, any determination that a foreign country is a NME country 
shall remain in effect until revoked by the administering authority. 
None of the parties to this proceeding has contested such treatment in 
this review. Furthermore, available information does not permit the 
calculation of NV using home market prices, third country prices or 
constructed value (``CV'') under section 773(a) of the Act. Therefore, 
we treated the PRC as an NME country for purposes of this review, and 
calculated NV by valuing the factors of production in a market economy 
country at a comparable level of economic development and which is a 
significant producer of comparable merchandise. Factors of production 
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 cost, including 
depreciation. See Section 773(c)(3) of the Act.

2. Surrogate Country

    In accordance with section 773(c)(4) of the Act and 19 CFR 
353.52(c), we determined that India is comparable to the PRC in terms 
of (1) per capita gross national product (``GNP''), (2) the growth rate 
in per capita GNP, and (3) the national distribution of labor. In 
addition, India is a significant producer of ferromanganese, which for 
this proceeding the Department has determined to be comparable 
merchandise. Therefore, for this review we have selected India as the 
surrogate country on the basis of the above criteria, and have used 
publicly available information relating to India, unless otherwise 
noted, to value the various factors of production. See Memorandum to 
Susan Kuhbach, Nonmarket Economy Status and Surrogate Country 
Selection, May 28, 1997 (attached to June 25, 1997 letters to 
interested parties), and Memorandum to Richard W. Moreland, From the 
Team, October 24, 1997. (A public version of all documents on the 
record cited in this notice can be obtained from the Central Records 
Unit (room B099 of the main Department of Commerce building).)

3. Factors of Production

    For purposes of calculating NV, we valued PRC factors of 
production, in accordance with section 773(c)(1) of the Act. In 
examining surrogate values, where possible we selected the publicly 
available value which was: (1) An average non-export value; (2) 
representative of a range of prices within the period of review 
(``POR'') or most contemporaneous with the POR; (3) product-specific; 
and (4) tax-exclusive. Where we could not obtain a POR-representative 
price for an appropriate surrogate value, we selected a value in 
accordance with the remaining criteria mentioned above and which was 
the closest in time to the POR. For a more detailed explanation of the 
methodology used in calculating the various surrogate values, see 
Memorandum to the File, From the Case Team, Calculations for the Final 
Determination, March 9, 1998. In accordance with this methodology, we 
have valued the factors as described below.
    We valued manganese ore using a September 1993 export price quote 
from a Brazilian manganese mine for manganese carbonate lump ore (see 
Comment 3). While it is our normal practice to apply an inflation 
adjustment to prices predating the period of review, information on the 
record indicates that prices for world-traded manganese ore have fallen 
over time. Therefore, we adjusted the price to account for declining 
manganese ore world prices between September 1993 and the POR.
    For the value of process chemicals used in the production process 
of manganese metal, we used values obtained from the following Indian 
sources: Indian Chemical Weekly (June 1995-May 1996); the Monthly Trade 
Statistics of Foreign Trade of India, Volume II--Imports, (February 
1996); and the 1995 Indian Minerals Yearbook (``IMY''). Where 
necessary, we adjusted these values to reflect inflation up to the POR 
using an Indian wholesale price index (``WPI'') published by the 
International Monetary Fund (IMF). Additionally, we adjusted these 
values, where appropriate, to account for differences in chemical 
content and to account for freight costs incurred between the suppliers 
and manganese metal producers.
    To value the labor input, we used data from the 1996 Yearbook of 
Labor Statistics (``YLS'') published by the United Nations. We adjusted 
these rates to reflect inflation up to the POR using an Indian consumer 
price index (``CPI'') published by the IMF. We used the CPI, rather 
than the WPI, for calculating the inflation adjustment to labor because 
the Department views the CPI as more representative of changes in wage 
rates, while the WPI is more representative of prices for material 
goods. See Heavy Forged Hand Tools From the People's Republic of China; 
Final Results of Antidumping Duty Administrative Reviews, 62 FR 11813, 
11816 (March 13, 1997).
    For selling, general, and administrative expenses (SG&A), factory 
overhead, and profit values, we used information from the January 1997 
Reserve Bank of India Bulletin for the Indian industrial grouping 
``Processing and Manufacturing: Metals, Chemicals, and Products 
Thereof.'' To value factory overhead, we calculated the ratio of 
factory overhead expenses to the cost of materials, labor, and energy. 
From the same source, we were able to calculate the selling, general & 
administrative (SG&A) expense as a percentage of the cost of 
manufacturing, and profit as a percentage of the cost of production 
(i.e., the cost of manufacturing plus SG&A).
    For most packing materials values, we used the per kilogram values 
obtained from the Indian Import Statistics. For one particular packing 
material, we

[[Page 12443]]

used a price quote from an Indian manufacturer and adjusted the value 
to reflect inflation up to the POR using the WPI published by the IMF. 
We used this price quote rather than the Indian Import Statistics 
because the quoted price was for the appropriate type of container 
used, whereas the Indian Import Statistics were aggregated over various 
types of containers. We made further adjustments to account for freight 
costs incurred between the PRC supplier and manganese metal producers.
    To value electricity, we used the average rate applicable to large 
industrial users throughout India as reported in the 1995 Confederation 
of Indian Industries Handbook of Statistics. We adjusted the March 1, 
1995 value to reflect inflation up to the POR using the WPI published 
by the IMF.
    To value rail freight, we relied upon rates quoted by a manganese 
mine in India. We adjusted the rate to reflect inflation up to the POR 
using WPI published by the IMF. To value truck freight, we used a rate 
derived from a newspaper article in the April 20, 1994 issue of The 
Times of India. We adjusted the rate to reflect inflation up to the POR 
using WPI published by the IMF.

Changes Subsequent to Preliminary Results

    The Department has made the changes indicated below to its margin 
calculations pursuant to comments received from interested parties. We 
note that because business proprietary treatment was requested by the 
respondents for certain factor inputs, these inputs will be referred to 
in the discussion below only as ``Factor A,'' ``Factor B,'' ``Factor 
C,'' etc. A key to this naming convention is provided in an attachment 
to the Memorandum to the File, From the Case Team, Calculations for the 
Final Determination (March 9, 1998).
    Rather than using the 82-84% MnO2 ore series listed in the 1995 
Indian Minerals Yearbook, we are now using an ore price submitted by 
the respondents from an Indian ore producer to value ``Factor B.''
    In the Preliminary Results, we considered the expense items 
``provident fund'' and ``employee welfare expense,'' as taken from the 
Reserve Bank of India Bulletin, to be part of factory overhead. 
Following previous Department decisions, however, in these Final 
Results we have determined that these expenses are included in the 
direct labor costs. Consequently, these expenses have been excluded 
from the components of factory overhead.
    We have changed the conversion factor used in converting liters to 
cubic centimeters in the calculation of the per unit cost of packing 
material ``Factor L.'' The conversion factor used in the preliminary 
results was incorrect.

Analysis of Comments Received

    We received comments from interested parties regarding the 
following topics:

1. Valuation of Factors of Production
    (a) Ore
    (b) Electricity
    (c) Labor
    (d) Chemicals
    (e) Overhead, SG&A and Profit
    (f) Packing
2. Valuation of By-product Credit
3. Combined Rates

    Summaries of the comments and rebuttals, as well as the 
Department's responses to the comments, are included below. For a more 
in-depth analysis of the various surrogate options see Memorandum to 
Richard W. Moreland, From the Manganese Metal Team, (October 24, 1997).

1. Valuation of Factors of Production

(a) Ore Valuation
    Comment 1: The petitioners argue that a price provided by Sandur 
Manganese & Iron Ores Ltd. (``Sandur'') for a manganese ore with 46-48% 
contained manganese is the best ore surrogate because this ore can be 
used to make manganese metal, its manganese-to-iron ratio is very close 
to that of the ore actually used by the respondents (``PRC ore''), and 
it represents a domestic Indian transaction price.
    The respondents contend that the Sandur ore is not chemically 
comparable to that ore actually used by the PRC producers because of 
the very significant difference in the manganese contents between the 
two. The respondents cite information on the record indicating that 
manganese content is a more important determinant of ore price than the 
manganese-to-iron ratio.
    Department's Position: The Department disagrees with the 
petitioners' contention that the Sandur price is the best ore surrogate 
option available. Information provided by the manganese industry expert 
at the US Geological Survey (the ``Department's expert'') indicates 
that manganese content is generally a more important determinant of ore 
prices than the manganese-to-iron ratio. See Memorandum to the File, 
From the Team, (October 14, 1997). Furthermore, according to the 
Department's expert, adjustments to ore prices to account for 
differences in the manganese contents of the PRC and surrogate ores 
would be reasonable only if the differences were small. The magnitude 
of difference in manganese contents between the PRC and Sandur ores 
suggests that the price of the latter is not representative of the 
value of the PRC ore. Moreover, the record is not explicit as to 
whether the Sandur price quote is an export price quote or a domestic 
price. For these reasons, the Department does not consider the Sandur 
ore price to be the best available surrogate in this review.
    Comment 2: The respondents argue in favor of using a domestic 
Indian price for an ore produced by a certain Indian manganese ore 
producer (``Producer X''). This price is the most suitable ore 
surrogate value, the respondents maintain, because the ore from 
Producer X has a manganese content very similar to that of the PRC ore. 
The respondents cite expert testimony on the record that this 
particular ore could theoretically be used to produce manganese metal. 
The petitioners counter, citing other expert testimony on record, that 
Producer X's ore is an unsuitable surrogate because its low manganese-
to-iron ratio as well as certain other chemical features would prevent 
it from being used in manganese metal manufacture.
    Department's Position: We disagree with the respondents' contention 
that the ore from the Indian Producer X is the best possible surrogate 
for the primary ore input in this review. Information on the record 
from the Department's expert indicates that ore in India with a similar 
manganese content as that of Producer X's ore is generally not used as 
the primary ore input in manganese metal production for reasons 
pertaining to the ore's chemistry. See Memorandum to the File, From 
Daniel Lessard, May 3, 1995 (included in the record of this review as 
an attachment to the October 10, 1997 Memorandum to the File, From the 
Team). The expert's opinion is further confirmed by information 
contained in the 1995 Indian Minerals Yearbook (``IMY''), which 
indicates that both the manganese content and the manganese-to-iron 
ratio of Producer X's ore fall below those of a range of standardized 
specifications for ore used in Indian ferromanganese manufacture. 
Moreover, the manganese content of the Brazilian surrogate used by the 
Department is closer to that of the PRC ore than the content of 
Producer X's ore. The Department also notes that the manganese-to-iron 
ratio of ore from Producer X is significantly below the minimum 
threshold argued by the

[[Page 12444]]

petitioners as necessary for producing manganese metal.
    Comment 3: The petitioners argue that the surrogate ore must be 
similar to the PRC ore, most importantly with regard to its manganese-
to-iron ratio, so that adjustments would not have to be made to other 
quantitative inputs. The petitioners continue, however, that though 
chemically similar to the PRC ore, the Brazilian ore value used by the 
Department is not the best surrogate choice because (1) Brazil is not 
among the Department's list of eligible surrogate countries for the 
PRC, (2) the Brazilian value represents an export price, which in the 
past the Department has considered less preferable to a domestic price 
because the exported ore may benefit from subsidies, (3) the value is a 
single price observation rather than an average value over a period of 
time, and (4) the price does not reflect a mine-mouth ore price and is 
therefore not representative of the PRC producers' ore costs.
    The respondents argue that the Brazilian ore price is an unsuitable 
surrogate value because it exceeds the value of high-grade Indian 
peroxide ore listed in the IMY which the Department's expert argued 
would itself overstate the value of the PRC ore. Moreover, the 
manganese-to-iron ratio of the Brazilian ore price is almost double the 
minimum argued by the petitioners. The petitioners counter that the 
respondents are wrong, as a point of fact, and that the record clearly 
indicates that both the Brazilian ore value used by the Department in 
its preliminary results and the Sandur ore price recommended by the 
petitioners are significantly lower on an MTU basis (i.e., per percent 
of contained manganese) than the high grade Indian peroxide ore.
    Department's Position: The Department disagrees with both the 
petitioners and the respondents. In considering the totality of 
evidence on record and in weighing the relative merits of all the 
surrogate options, the Department maintains that the Brazilian ore best 
reflects the physical and chemical characteristics of the PRC ore and, 
thus, best reflects the value of the PRC ore.
    With regard to the petitioners' first specific objection to the 
Brazilian ore as enumerated above, while it is true the Department's 
preference is to use surrogate values from a country it has deemed to 
be at a level of economic development comparable to that of the non-
market economy involved, the Act states that the Department must only 
do so ``to the extent possible.'' See section 773(c)(4) of the Act. 
Section 773(c)(1) of the Act further states that, ``the valuation of 
the factors of production shall be based on the best available 
information regarding values of such factors in a market economy 
country or countries considered appropriate by the administering 
authority.'' In the past, in proceedings where the facts on record 
indicate that the Department's usual practice would not permit the 
accurate valuation of a factor input, the Department has chosen 
surrogates from countries not included among the Department's list of 
potential surrogate countries. See Notice of Final Determination of 
Sales at Less Than Fair Value: Certain Cased Pencils from the People's 
Republic of China, 59 FR 55625 (November 8, 1994) (``Pencils'').
    After careful consideration of the information submitted in this 
review by both the petitioners and the respondents, as well as 
information resulting from the Department's own research, we have 
determined that none of the proposed Indian ore prices represents the 
best surrogate for the PRC ore available in this review. In making this 
decision we have taken into account inter alia the fact that there is 
no consensus among the petitioners and the respondents regarding the 
suitability of any of the Indian ore surrogate choices. Each party has 
submitted a considerable amount of evidence and expert opinion 
detailing why every one of the other party's proposed Indian surrogate 
is inappropriate on grounds of either price or chemical comparability.
    The proposed Brazilian ore surrogate, however, falls within the 
criteria for comparability advocated by both sides. The manganese 
content of the Brazilian ore is even closer to that used by the PRC 
producers than the Indian surrogate advocated by the respondents, while 
the manganese-to-iron ratio is above the minimum necessary, as the 
petitioners argue it should be, for the ore to be useable in manganese 
metal manufacture. Moreover, with regard to a certain unique chemical 
feature, the Brazilian ore is of the same type as the PRC ore, whereas 
none of the potential Indian surrogates is of this type. Information on 
the record indicates that certain unique aspects of the respondents' 
manufacturing process and, consequently, the respondents' costs of 
production are contingent on the use of ore with this particular 
chemical feature.
    Regarding the petitioners' second objection, it is correct that the 
Department has generally not chosen to use for a surrogate value an 
export price from a country which maintains non-specific export 
subsidies, or subsidies specific to the factor in question. We note 
however, that the Department has the discretion to use such a factor 
where appropriate.
    The petitioners have cited the 1997 National Trade Estimate on 
Foreign Trade Barriers (USTR), which indicates that the government of 
Brazil offers a variety of tax and tariff incentives to encourage 
production of exports. The one export subsidy program identified 
explicitly in that report is Brazil's export credit program known as 
PROEX.
    The Department first notes that the Brazilian price quote was for 
exports of manganese ore to the United States. In the course of its 
investigations into subsidies in other cases of Brazilian exports to 
the United States, the Department has identified certain export 
subsidies schemes in Brazil. However, in all the cases reviewed these 
programs have been deemed by the Department either to have been not in 
use at the time, terminated altogether, or of such a small magnitude as 
to confer only a de minimis or minimal benefit. See, e.g., Final 
Results of Countervailing Duty Administrative Review: Certain Castor 
Oil Products from Brazil, 60 FR 20478 (April 26, 1995); Cotton Yarn 
from Brazil; Preliminary Results of Countervailing Duty Administrative 
Review 59 FR 68 (January 3, 1994); Certain Agricultural Tillage Tools 
from Brazil; Final Results of Countervailing Duty Administrative 
Review, 60 FR 48692 (September 20, 1995); Final Affirmative 
Countervailing Duty Determination: Certain Hot Rolled Lead and Bismuth 
Carbon Steel Products from Brazil, 58 FR 6213 (January 27, 1993). 
PROEX, in particular, is among the programs the Department determined 
were not in use. In the two Brazilian countervailing cases involving 
iron ore and iron ore pellets, the Department determined that iron ore, 
a mineral extraction industry like manganese ore, was not eligible to 
participate in the PROEX (or its predecessor FINEX) program, which is 
available only to producers of ``manufactured'' products. See Pig Iron 
from Brazil; Preliminary Results of Countervailing Duty Administrative 
Review, 58 FR 6246 (January 27, 1993) and Final Affirmative 
Countervailing Duty Determination; Iron Ore Pellets from Brazil, 51 FR 
21961, 21964 (June 17, 1986). For these reasons, the Department has 
determined that the merits of using the Brazilian ore price outweigh 
concerns over Brazilian export subsidies and, consequently, that an 
exception to the Department's more general practice of not using export 
prices as surrogate values is appropriate in this case.

[[Page 12445]]

    Addressing the petitioners' point that the Brazilian price is for 
an individual transaction, information on the record indicates that 
prices for globally-traded manganese ore are usually set on an annual 
contract basis. It is therefore reasonable to assume that the September 
1993 Brazilian price quote represents a price which was in effect at 
least over several months rather than a stand-alone spot price.
    Finally, in their fourth objection to the Brazilian ore, the 
petitioners imply that there is significant variation in the price of a 
given ore, on an MTU, ex-mine basis, arising from differences in the 
distance over which the ore must be transported. However, information 
on the record provided by the Department's expert indicates that prices 
for relatively high-quality ore--which, the petitioners have argued, 
any ore useable in manganese metal production (including the Brazilian 
ore series) must be--are largely uniform worldwide. There is no 
significant bifurcation of the market for higher-grade ores. 
Consequently, the Brazilian export price, adjusted for inland 
transportation, is a reasonable surrogate value for the PRC ore at the 
mine-mouth.
    Turning to the respondents' arguments, the Department disagrees 
with the respondents' assertion that the Brazilian ore price is higher 
than the prices of the peroxide ores listed in the IMY. Rather, on an 
ex-mine, $/MTU basis the Brazilian value is less than two-thirds that 
of the lowest-cost Indian peroxide ore (i.e., 82-84% MnO2). See Exhibit 
B of Memorandum to the File, From the Team, Calculations for the 
Preliminary Determination of the First Administrative Review of the 
Antidumping Duty Order on Manganese Metal from the People's Republic of 
China (October 31, 1997). Moreover, the respondents have argued that 
manganese content is the largest determinant of ore prices and, 
therefore, surrogate suitability. The Department notes that the 
manganese content of the Brazilian ore is more comparable to that used 
by the PRC producers than the respondents' proposed ore surrogate from 
Producer X.
    For all these reasons, the Department has decided that none of the 
possible Indian ore surrogates would allow for the accurate valuation 
of the PRC ore. Consequently, we are continuing to use the Brazilian 
ore price for the purposes of the Final Results.
    Comment 4: The petitioners argue that the Department's adjustment 
to the 1993 Brazilian ore price to make it contemporaneous with the POR 
was incorrect. According to the petitioners, the Brazilian ore is more 
properly treated as a domestically traded ore influenced by local 
conditions. The correct adjustment methodology, the petitioners 
therefore contend, would be to adjust the 1993 Brazilian price 
(restated in Reals/MTU) by the change in the Brazilian wholesale price 
index between September 1993 and the POR, and then convert this 
adjusted price into US dollars using the POR exchange rate.
    Department's Position: The Department disagrees with the 
petitioners' proposed method of adjustment. The petitioners have argued 
that only relatively higher-quality ore can be used in manganese metal 
manufacture, and they have also noted that the Brazilian ore appears to 
be suitable for use in the production of manganese metal. We can 
reasonably conclude, therefore, that the Brazilian ore is a higher-
quality ore. Moreover, exports of such ore from Brazil constitute part 
of an international market for which there are well-established, quoted 
prices that are denominated in US dollars. In such circumstances, a 
price index for this market would be the most appropriate basis for 
making an intertemporal adjustment to the Brazilian export price. 
However, to the Department's knowledge no such index exists. As a proxy 
for such an index, therefore, we have used the annual contract prices 
for the years 1993-1995 charged by one of the largest producers in the 
international manganese ore market. According to the Department's 
expert, this is a reasonable adjustment methodology because inter alia 
the higher-grade manganese ores traded on world markets are generally 
priced within a narrow band.
    Comment 5: The petitioners argue that the Sandur ore, with 46-48% 
contained manganese, is the best surrogate value for Factor B because 
the chemical composition of the Sandur ore is comparable to Factor B. 
Moreover, the Sandur ore, the petitioners claim, represents a domestic 
Indian transaction price. If, the petitioners argue, the Department 
persists in using the 82-84% MnO2 peroxide ore as listed in 
the IMY to value Factor B, the price should be time-adjusted using the 
Indian wholesale price index to make it contemporaneous to the POR.
    The respondents also argue that the 82-84% MnO2 peroxide 
ore used by the Department in its preliminary results was an unsuitable 
surrogate for Factor B because of a significant difference in the 
manganese contents between the two. For reasons similar to those cited 
in the Department's response to Comment 1 above, the Department's 
chosen surrogate significantly overstates the cost of the ore actually 
used by the PRC producers. Thus, the respondents contend that the 
Department should use the ore price of ``Producer X'' (discussed in 
Comment 2 above) or, in lieu of that, the Sandur ore proposed by the 
petitioners.
    Department's Position: The Department has chosen the ore price 
quote from Producer X because its manganese content coincides with the 
reported range of Factor B, the price is contemporaneous with the POR, 
and it is clearly a domestic price for India, the surrogate country 
chosen for this review. Although the Sandur ore also coincides with the 
reported range of manganese content for Factor B, the price is not 
contemporaneous with the POR. Moreover, as discussed in the 
Department's position in Comment 1 above, the record is not explicit as 
to whether the Sandur value is a domestic market or an export price for 
India.
    Finally, with regard to the petitioners' argument about the time-
adjustment methodology, the Department is now using the ore price from 
Producer X to value Factor B. Because this price is contemporaneous 
with the POR, no time-adjustment is necessary.
(b) Electricity Valuation
    Comment 6: The petitioners argue that the most suitable surrogate 
value for electricity is an average rate in effect in 1996 across those 
Indian states which contain the bulk of the Indian manganese ferroalloy 
production. The rate used by the Department in the Preliminary Results 
understates the true cost, the petitioners contend, because it 
represents an average rate applicable to all Indian states, including 
those states in which the electricity sector is still state-owned and 
therefore rate increases are tightly controlled, as well as those 
states in which no ferroalloy production is located. Moreover, although 
the record indicates that a few Indian ferroalloy producers in these 
states have captive electricity generation and are therefore not 
subject to the grid rate for that energy which is self-generated, these 
producers represent only a small percentage of the total number of 
Indian producers. The petitioners further argue that the strategy of 
the manganese industry in China is to locate manganese metal production 
facilities close to the manganese mine and, therefore, if India did 
have manganese metal producers they, like the Indian ferroalloy 
producers, would also likely be located in those states with large 
manganese ore deposits.
    The respondents counter that there is no evidence on the record to 
support the petitioners' assertion that there is a

[[Page 12446]]

general strategy in China to locate the manganese metal plants at the 
mine-mouth, noting that three or four manganese metal producers 
investigated by the Department were not located at the mine mouth.
    Department's Position: We disagree with the petitioners. There is 
insufficient evidence on the record from which to conclude that the 
developments affecting the electricity prices of Indian ferromanganese 
necessarily reflect conditions in which the PRC manganese metal 
producers likewise must operate. For example, the generally higher 
electricity rates in those Indian states which contain the bulk of 
ferromanganese producers are not necessarily a result of the presence 
of a ferromanganese industry in those states. To the contrary, the 
record suggests the rate differences among states are usually due to 
more general, state-specific circumstances such as uneven progress in 
the privatization of power generation and distribution, as well as 
local power shortages. See Metal Bulletin, July 4, 1996. In lieu of 
concrete evidence that the higher state-specific rates are directly a 
result of the presence of manufacturers of identical or comparable 
merchandise, Departmental practice in past cases has been to take a 
simple average of electricity rates for the surrogate country as a 
whole. See Notice of Final Determination of Sales at Less Than Fair 
Value; Polyvinyl Alcohol from the People's Republic of China, 61 FR 
14057, 14062 (March 29, 1996).
    Moreover, information on the record provided by the petitioners in 
fact indicates that some manganese ferroalloy producers in those Indian 
states with some of the highest electricity rates will likely be forced 
to close precisely because of their high energy costs. Other producers 
in these states, the information suggests, will either be forced to 
move production to other states with lower rates or build self-
generating electricity capacity. See Metal Bulletin, June 27, 1996.
    The petitioners also maintain that the record only identifies four 
ferroalloy producers in these states who have captive electrical 
generation capacity out of a total of roughly 70 Indian ferroalloy 
producers. In response, the Department notes that according to 
information in the 1993 Ferroalloy Directory & Databook, the four 
producers named together represent a disproportionately large 
percentage of overall Indian ferroalloy production.
    Furthermore, we agree with the respondents' contention that there 
is insufficient information on the record to conclude that the general 
strategy of the PRC manganese metal industry is to locate its plants at 
the mine mouth. To the contrary, information on the record states that 
imports of manganese ore into China grew to more than 1.5 million tons 
annually during the POR, making China one of the world's largest 
importers of manganese ore. Among the reasons cited for an increasing 
preference among the PRC for imported manganese ore is that the high 
grade imported ore is more economical than domestically-mined low-grade 
ore. In the absence of explicit factual information supporting the 
petitioners' contention of a general PRC strategy, one would expect 
that the general strategy would be to locate plants close to ports of 
importation in order to minimize the costs of transportation which, as 
the petitioners' have argued, can be considerable.
(c) Labor Valuation
    Comment 7: In its preliminary results, the Department used a 1991 
labor cost for India as reported in the 1996 Yearbook of Labor 
Statistics (``YLS''). The respondents argue that this is an 
inappropriate surrogate because it does not differentiate between 
skilled and unskilled workers. This is a crucial distinction, the 
respondents contend, because a very high percentage of lower cost, 
unskilled labor is used by the respondents. If the unskilled to skilled 
ratio is lower in India than in China, the average Indian labor cost 
would overstate the respondents' actual costs of labor. The respondents 
recommend using instead the labor cost information contained in 
Investing, Licensing & Trading Conditions Abroad: India 1996 (``IL&T'') 
as published by the Economist Intelligence Unit or, in lieu of the IL&T 
data, using the cost data in Foreign Labor Trends. Both of these 
sources, the respondents note, report a separate value for skilled and 
unskilled workers, and the information in both more closely coincides 
with the POR. Furthermore, the Department has used information from 
Foreign Labor Trends to value labor costs in other cases.
    The petitioners first argue that the respondents' reported 
percentage of unskilled to overall workers is unrealistically high. 
Moreover, the petitioners continue, the data in the Foreign Labor 
Trends represents minimum wages for factory workers in Delhi only, an 
area in which no producers of comparable material are located. The 
petitioners further contend the IL&T is also not a suitable surrogate 
because its rates are only ``indicative'' and therefore may be 
distorted by significant variation in wages by state and industry. 
Rather, the petitioners argue, the YLS information provides the best 
surrogate value because it is specific to the Indian basic metals 
industry, and it was used in the underlying investigation.
    Department's Position: We disagree with the respondents' contention 
that either the IL&T or the Foreign Labor Trends data represent 
surrogate labor values preferable to the YLS. The data in Foreign Labor 
Trends represent only minimum wage rates for workers in Delhi 
factories. Given the information on record indicating that wages in 
India vary considerably by industry, company size and region, there is 
no basis on which to conclude that minimum factory wages in Delhi 
factories reflect average wage rates across the Indian economy. The 
YLS, on the other hand, provides labor rates for the basic metals 
industry for India as a whole. The Department notes that in the final 
determination of the furfuryl alcohol investigation cited by the 
respondents, the Department changed its methodology and abandoned use 
of the Foreign Labor Trends data on the grounds that that data were 
found to be ``not appropriate for valuing labor factors.'' See 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).
    With regard to the IL&T data, in corresponding with the Economist 
Intelligence Unit regarding the methodology used to compile labor 
information, the Department learned that the reported average monthly 
wages are based solely on wages stipulated by Indian law rather than on 
any survey of average wages actually paid. Moreover, it appears from 
the text in the IL&T data that the wage rates do not include additional 
mandatory and voluntary benefits which normally add an additional 40-
50% to the base pay. See IL&T at 52 and 53. The Department, in choosing 
a surrogate labor value, seeks to reflect the average fully-loaded cost 
(i.e., including all costs and benefits in addition to basic wage) of 
employing labor on as industry-specific a basis as possible. See, e.g., 
Certain Helical Spring Lock Washers from the People's Republic of 
China; Final Results of Antidumping Administrative Review, 61 FR 66255, 
66259 (December 17, 1996) and Notice of Final Determination of Sales at 
Less Than Fair Value; Polyvinyl Alcohol from the People's Republic of 
China, 61 FR 14057, 14061 (March 29, 1996).
    Finally, it has been a longstanding practice of the Department to 
apply the single average labor rate reported for India in the YLS to 
all reported skill levels. See e.g., Notice of Final

[[Page 12447]]

Determination of Sales at Less Than Fair Value: Persulfates from the 
People's Republic of China, 62 FR 27222, 27229 (May 19, 1997); Heavy 
Forged Hand Tools from the People's Republic of China: Final Results of 
Antidumping Duty Administrative Reviews, 62 FR 11814, 11815 (March 13, 
1997); Certain Helical Spring Lock Washers from the People's Republic 
of China; Final Results of Antidumping Duty Administrative Review, 62 
FR 61794, 61780 (November 19, 1997).
(d) Chemical Valuation
    Comment 8: The petitioners argue that the Department's use in the 
preliminary results of a domestic Indian price for sodium sulphide as a 
surrogate for a certain process chemical (``Factor C'') is incorrect. 
Instead, the petitioners contend, a U.S. price quote on record for the 
actual chemical is a preferable surrogate to sodium sulphide which, the 
petitioners further allege, is not even a true substitute for Factor C. 
The respondents counter by pointing to expert testimony on the record 
stating that sodium sulphide is a reasonable substitute for Factor C in 
the manganese metal production process. The respondents further argue 
that using the petitioners' U.S. price for a surrogate value for Factor 
C would be contrary to the Act because the United States is not at a 
level of economic development comparable to that of China.
    Department's Position: We agree with the respondents in part. There 
is sufficient factual information on the record to conclude that sodium 
sulphide is comparable to Factor C. Generally, the Department's 
practice is to use values taken from the chosen surrogate country 
wherever possible. In this review, therefore, the Department has chosen 
the domestic Indian market price available for sodium sulphide over the 
surrogate value from the US market.
    Comment 9: The petitioners contend that the Department erroneously 
classified four process chemicals (i.e., Factor D, Factor E, Factor F, 
and Factor G) as part of factory overhead rather than as direct 
material costs. The petitioners provide an excerpt from Plant Design 
and Economics for Chemical Engineers (1991) (``Plant Design'') which 
they claim demonstrates that under ordinary cost accounting principles 
these process chemicals are treated as direct factors of production. 
Moreover, the petitioners contend, any distinction drawn in the use of 
these chemicals and other chemicals which have been treated as direct 
material inputs in this review is arbitrary. They note, for instance, 
that certain chemicals which were treated as direct material inputs in 
the preliminary results are not entirely consumed in the manufacturing 
process but, rather, are recycled back through the production circuit.
    The respondents counter that it has been the Department's 
established policy to treat indirect materials as part of factory 
overhead. Indirect materials, according to the respondents, have been 
defined as materials which are not physically incorporated into the 
final product. The respondents note that during the Department's 
verification of the PRC production facility, these chemicals were 
observed to be used for cleaning and pacification purposes only. 
Therefore, the respondents argue, these chemicals are indirect costs 
subsumed within the general overhead cost category.
    Department's Position: We agree with the respondents. In the Final 
Determination of Sales at Less than Fair Value: Manganese Metal from 
the PRC, 60 FR 56045, 56051 (November 6, 1995), the petitioners also 
relied on Plant Design to support their claim that the same process 
chemicals should be treated as direct factors of production. However, 
in that segment the Department determined that, because the process 
chemicals were used either after the metal had been produced or for 
cleaning purposes unrelated to the actual production process, the 
chemicals in question are properly classified as part of factory 
overhead. This distinction is consistent with the methodology used by 
the Department in prior cases. See e.g., Heavy Forged Hand Tools from 
the People's Republic of China, 60 FR 49251, 49254 (September 22, 
1995). Furthermore, in the Preliminary Determination of Sales at Less 
Than Fair Value; Certain Cut-to-Length Carbon Steel Plate from the 
People's Republic of China, 62 FR 31972, 31977 (June 11, 1997), the 
Department determined that the treatment of indirect materials as 
overhead is consistent with the Compendium of Statements and Standards: 
Accounting (India). Therefore, we have continued to classify the 
process chemicals in question as part of factory overhead.
(e) SG&A/Profit Valuation
    Comment 10: The petitioners argue that the Department's use in its 
preliminary results of data reported in the Reserve Bank of India 
Bulletin (``RBI Bulletin'') to value overhead, SG&A, and profit is 
incorrect. The reported average for the RBI Bulletin industrial 
grouping ``Processing and Manufacture--metals, chemicals and products 
thereof,'' the petitioners contend, understates the actual profit and 
SG&A expenses incurred in manganese metal manufacture because the 
composite includes several low-value-added (fabrication) industries 
which generally experience low SG&A expenses and profits compared with 
high-value-added (processing) industries such as manganese metal. The 
petitioners argue that the understated nature of the RBI Bulletin data 
is clearly illustrated by comparing the RBI Bulletin profit with the 
significantly higher certificate of deposit, commercial paper and 
Treasury Bill yields in effect in India during the same period. No new 
private investors would invest in the Indian manganese metal or 
ferroalloy industry, the petitioners contend, if they expected a rate 
of return on their investment comparable to the RBI Bulletin profit 
level, especially given the much higher rates of return in the 
relatively less risky alternative investments noted above. The 
petitioners argue that a more suitable surrogate for SG&A and profit 
would be actual data taken from the financial statements of two Indian 
companies (i.e., Hindalco and TISCO), both operating in high-value-
added industries. In the case of profits, the petitioners argue that if 
the Department chooses not to use the company-specific data it should, 
at a minimum, use a figure which reflects a low risk alternative 
investment strategy such as an Indian CD, commercial paper, or Treasury 
Bill rate.
    The respondents counter that neither Hindalco or TISCO, the two 
Indian companies for which the petitioners have provided financial 
statements, is dedicated solely to the production of manganese metal or 
a comparable product and, therefore, their specific financial 
performance does not necessarily reflect that of the manganese 
industry. On the other hand, because India is a large producer of 
comparable merchandise, it is reasonable to assume that the financial 
performance of the domestic manganese industry is reflected in the RBI 
Bulletin average data. Therefore, the RBI Bulletin data provides the 
best surrogate value for SG&A and profit.
    Department's Position: The Department agrees with the respondents 
that the RBI Bulletin data represent the best available surrogate value 
for SG&A and profit in this review. While the Department would 
generally prefer to base SG&A and profit on financial information 
specific to the production of identical or comparable merchandise in 
India, this information is not available in this administrative review.
    The petitioners argue that the RBI Bulletin should not be used 
because it contains a broad variety of industries.

[[Page 12448]]

However, according to its 1995-96 Annual Report, TISCO also produces a 
broad variety of products including, inter alia, cement, welded steel 
tubes, cold rolled strips, ammonium sulphate, bearing rings, and 
metallurgical machinery in addition to a small amount of comparable 
merchandise (i.e., ferromanganese). The aggregate TISCO data therefore 
do not resolve the problems raised by the petitioners.
    With respect to Hindalco, this company produces aluminum--a product 
which has not been found to be comparable to manganese metal by either 
party or the Department. See e.g., the petitioners' submission dated 
March 17, 1995 at page 4. Additionally, Hindalco's 1996-97 Annual 
Report at pages 14 and 37 seems to indicate that the company also 
produces a number of other products wholly unrelated to the production 
of manganese metal, including fabricated products (e.g., rolled and 
extruded products). Moreover, the Hindalco data include energy which 
cannot be separated from factory overhead.
    The Department likewise disagrees with the petitioners' contention 
that at the very least profit should reflect the return on a low risk 
investment strategy in India. Whether or not the RBI Bulletin rate 
would have been sufficient to induce new investment into the industry, 
what is relevant in this case to the valuation of the PRC profit rate 
is the actual financial experience of existing Indian ferromanganese 
producers during the POR. Although the RBI Bulletin data are not 
specific to producers of comparable merchandise, they do reflect the 
actual experience of producers of comparable merchandise and a 
reasonably close group of like industries. Thus, this information is 
the best surrogate available.
    Comment 11: The respondents argue that ``provident fund'' and 
``employee's welfare expense'' should not be included among the 
overhead expenses as taken from the RBI Bulletin. These expenses, the 
respondents argue, are labor related and therefore already included in 
the direct labor cost component of the cost of manufacture (``COM''). 
The respondents note that in certain recent proceedings the Department 
included such expenses in the direct labor component rather than in 
overhead. The petitioners argue that in the underlying investigation, 
the Department determined that the provident fund should be included in 
factory overhead based on the nature of how the expense was incurred. 
There is no information on the record of this review which supports a 
different determination from that in the investigation and, therefore, 
the Department should continue using the methodology used in the 
preliminary results.
    Department's Position: We agree with the respondents. The 
Department has reconsidered the methodology used in its final 
determination of the LTFV investigation for classifying the expense 
items ``provident fund'' and ``employee welfare expense.'' The 
Department considers the YLS data to be fully loaded with respect to 
all labor expenses, incorporating such costs as contributions to the 
provident fund and employee welfare expenses. See Notice of Final 
Determination of Sales at Less Than Fair Value; Polyvinyl Alcohol from 
the People's Republic of China, 61 FR 14057, 140614 (March 29, 1996). 
Therefore, in order to be consistent with Department practice in other 
cases (e.g., Sulfanilic Acid from the People's Republic of China; Final 
Results and Partial Rescission of Antidumping Duty Administrative 
Review, 61 FR 53702, 53710 (October 15, 1996)), we have removed these 
two expense items from the factory overhead and reclassified them as 
part of the direct labor inputs component of the COM.
(f) Packing Material Valuation
    Comment 12: The respondents and the petitioners both contend that 
the Department erred in its conversion from liters to cubic centimeters 
in calculating the per unit cost of Factor L in the preliminary 
results.
    Department's Position: We agree with both the petitioners and the 
respondents that an error was made in the conversion from liters to 
cubic centimeters in calculating the cost of Factor L. We have made the 
appropriate changes to the packing calculations for these Final 
Results.

(2) Valuation of By-Product Credit

    Comment 13: The petitioners argue that the by-product generated 
during the respondents' manufacturing process is a low-quality and, 
therefore, low-value product. Electrolytic manganese dioxide (``EMD''), 
which the respondents argue is a product comparable to the by-product, 
is a very high-value product. The petitioners contend that because 
there are such fundamental differences in the chemical composition of 
EMD and the by-product, EMD would not be a suitable surrogate for the 
by-product.
    The respondents counter that the by-product resulting from 
manganese metal manufacture has value, as illustrated by the fact that 
the PRC producers sell it to nearby unaffiliated industrial operations. 
It cannot be valued as an ore, the respondents continue, because it is 
a product resulting from the electrolysis of an ore. Thus, the 
respondents conclude, a more suitable surrogate would be the value of 
EMD. The Department, the respondents argue, acknowledged the intrinsic 
value of this by-product in the original investigation when it used for 
a surrogate the Indian import value of ``Manganese Dioxide, excluding 
ores.''
    Department's Position: The Department disagrees with the 
respondents' argument for the use of EMD as a surrogate value. First, 
the respondents are incorrect in stating that the Department used for a 
by-product surrogate in the LTFV investigation an Indian import value 
for manganese dioxide excluding ores. In the LTFV Final Determination, 
the Department used an 82-84%MnO2 peroxide ore, as listed in the 1993 
Indian Minerals Yearbook, to value the respondents' by-product credit. 
EMD is a very high-valued product used mainly in the production of dry-
cell batteries. See Attachment III to Memorandum to Richard W. 
Moreland, From the Manganese Metal Team, October 24, 1997. The 
respondents have not sufficiently demonstrated that the PRC by-product 
is of the same rigorous specifications as EMD.
    The respondents have demonstrated, however, that their by-product 
does have some resale value. See Memorandum For: The File, From: Daniel 
Lessard, Subject: Verification of XTMM, October 12, 1997. In lieu of 
any information on the Indian value of the actual by-product in 
question, the Department is maintaining the methodology used in the 
LTFV Final Determination of using for a surrogate the price of high-
valued Indian manganese dioxide ore.

3. Combined Rates

    Comment 14: The petitioners argue, citing the Department's new 
regulations adopted in May 1997, that combination duty deposit rates 
should be established separately for XTMM/HIED and XTMM/CMIECHN/
CNIECHN. The current company-specific rates are far lower than the 
China-wide rate, the petitioners argue, leading to the potential for 
PRC producers not reviewed in this proceeding to export through one of 
the companies with the lower company-specific rate.
    The respondents counter that the new regulations do not change the 
Department's past policy regarding the assignment of rates in non-
market economy cases. Moreover, the current review is not subject to 
the Department's new regulations.

[[Page 12449]]

Therefore combination rates should not be established.
    Department's Position: We agree with the respondents. It has been 
the Department's practice in cases involving non-market economies to 
assign rates to exporters rather than producers because it is the 
exporter who actually determines the price at which the subject 
merchandise is sold in the United States. See Persulfates from the 
People's Republic of China, 62 FR 27222, 27227 (May 19, 1997). 
Moreover, in the preamble to the final regulations (see, Antidumping 
Duties; Countervailing Duties, 62 FR 27296, 27305 (May 19, 1997)), the 
Department states that it intends to continue calculating antidumping 
rates for NME export trading companies, and not the manufacturers 
supplying the trading companies. Therefore, combination rates in this 
case are not appropriate.

Final Results of Review

    As a result of our analysis of the comments we received, we have 
made changes to those margins presented in our preliminary results. We 
determine the following weighted-average margins existed for the period 
June 1, 1995 through January 31, 1997:

------------------------------------------------------------------------
                                                                Margin  
                    Manufacturer/exporter                      (percent)
------------------------------------------------------------------------
HIED........................................................        2.80
CMIECHN/CNIECHN.............................................        1.56
CEIEC *.....................................................       11.77
Minmetals *.................................................        5.88
PRC-wide....................................................     143.32 
------------------------------------------------------------------------
* CEIEC and Minmetals both reported that they had no sales to the United
  States during the POR. The specific rate for each of these companies  
  will therefore remain unchanged from that determined in the Final     
  Determination of LTFV investigation.                                  

Assessment Rates

    The Department shall determine, and the Customs Service shall 
assess, antidumping duties on all appropriate entries. Individual 
differences between export price (``EP'') and normal value (``NV'') may 
vary from the percentages stated above. We have calculated exporter/
importer-specific duty assessment rates based on the ratio of the total 
amount of duties calculated for the examined sales made during the POR 
to the total value of subject merchandise entered during the POR. In 
order to estimate entered value, we subtracted international movement 
expenses (e.g., international freight and marine insurance) from the 
gross sales value. This rate will be assessed uniformly on all entries 
of that particular importer made during the POR. The Department will 
issue appraisement instructions directly to the Customs Service.
    The following cash deposit requirements will be effective upon 
publication of this notice of Final Results of this administrative 
review for all shipments of the subject merchandise entered, or 
withdrawn from warehouse, for consumption on or after the publication 
date, as provided for by section 751(a)(1) of the Act: (1) for the 
companies named above that have separate rates and were reviewed (i.e., 
China Hunan International Economic Development Corporation (HIED) and 
China Metallurgical Import & Export Hunan Corporation/Hunan Nonferrous 
Metals Import & Export Associated Corporation (CMIECHN/CNIECHN)), the 
cash deposit rates will be the rates listed above specifically for 
those firms; (2) for companies which established their eligibility for 
a separate rate in the LTFV investigation but were found not to have 
exported subject merchandise to the United States during the POR (i.e., 
China National Electronics Import & Export Hunan Company (``CEIEC'') 
and Minmetals Precious & Rare Minerals Import & Export Co. 
(``Minmetals'')), the cash deposit rates continue to be the currently 
applicable rates of 11.77% and 5.88%, respectively; (3) for all other 
PRC exporters, all of which were found not to be entitled to a separate 
rate, the cash deposit rate will continue to be 143.32%; and (4) for 
non-PRC exporters of subject merchandise from the PRC, the cash deposit 
rate will be the rate applicable to the PRC supplier of that exporter. 
These deposit requirements will remain in effect until publication of 
the Final Results of the next administrative review.
    This notice serves as a reminder to importers of their 
responsibility under 19 CFR 353.26 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 has occurred and the subsequent 
assessment of double antidumping duties.
    This notice also serves as the only reminder to parties subject to 
administrative protective orders (``APOs'') of their responsibility 
concerning disposition of proprietary information disclosed under APO 
in accordance with 19 CFR 353.34(d). Timely written notification of the 
return or destruction of APO materials or conversion to judicial 
protective order is hereby requested. Failure to comply with the 
regulations and the terms of an APO is a sanctionable violation.
    This administrative review and notice are in accordance with 
section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and 19 CFR 353.22.

    Dated: March 9, 1998.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 98-6551 Filed 3-12-98; 8:45 am]
BILLING CODE 3510-DS-P