[Federal Register Volume 66, Number 247 (Wednesday, December 26, 2001)]
[Notices]
[Pages 66398-66402]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-31643]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-873 and A-791-815]


Notice of Initiation of Antidumping Duty Investigations: 
Ferrovanadium From the People's Republic of China and the Republic of 
South Africa

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

ACTION: Initiation of Antidumping Duty Investigations.

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EFFECTIVE DATE: December 26, 2001.

FOR FURTHER INFORMATION CONTACT: Mark Manning or Chris Brady at (202) 
482-5253 and (202) 482-4406, respectively; Import Administration, 
International Trade Administration, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, NW., Washington, DC 20230.

SUPPLEMENTARY INFORMATION:

Initiation of Investigations

The Applicable Statute and Regulations

    Unless otherwise indicated, all citations to the statute are 
references to the provisions effective January 1, 1995, the effective 
date of the amendments made to the Tariff Act of 1930, as amended (the 
Act), by the Uruguay Round Agreements Act (URAA). In addition, unless 
otherwise indicated, all citations to the Department of Commerce's (the 
Department's) regulations are references to the provisions codified at 
19 CFR Part 351 (2000).

The Petition

    On November 26, 2001, the Department received a petition filed in 
proper form by the Ferroalloys Association Vanadium Committee and its 
members: Bear Metallurgical Company, Shieldalloy Metallurgical 
Corporation, Gulf Chemical & Metallurgical Corporation, U.S. Vanadium 
Corporation, and CS Metals of Louisiana LLC (collectively, the 
petitioners). The Department received information supplementing the 
petition on December 7, 2001.
    In accordance with section 732(b) of the Act, the petitioners 
allege that imports of ferrovanadium from the People's Republic of 
China (PRC) and the Republic of South Africa (South Africa) are being, 
or are likely to be, sold in the United States at less than fair value 
within the meaning of section 731 of the Act, and that such imports are 
materially injuring, or are threatening to materially injure, an 
industry in the United States.
    The Department finds that the petitioners filed this petition on 
behalf of the domestic industry because they are interested parties as 
defined in sections 771(9)(C) and 771(9)(D) of the Act and have 
demonstrated sufficient industry support with respect to each of the 
antidumping investigations that they are requesting the Department to 
initiate (see the Determination of Industry Support for the Petition 
section below).

Scope of Investigations

    The scope of these investigations covers all ferrovanadium produced 
in the PRC and South Africa, regardless of grade, chemistry, form, 
shape or size. Ferrovanadium is an alloy of iron and vanadium that is 
used chiefly as an additive in the manufacture of steel. The 
merchandise is commercially and scientifically identified as 
ferrovanadium. The scope of this investigation specifically excludes 
vanadium additives other than ferrovanadium, such as nitrided vanadium, 
vanadium-aluminum master alloys, vanadium chemicals, vanadium oxides, 
vanadium waste and scrap, and vanadium-bearing raw materials such as 
slag, boiler residues and fly ash. Merchandise under the following 
Harmonized Tariff Schedule of the United States (HTSUS) headings are 
specifically excluded:
     2850.00.2000 Hydrides, nitrides, azides, silicides and 
borides, whether or not chemically defined, other than compounds which 
are also carbides of heading 2849: * * * Of vanadium.
     8112.40.3000 Beryllium, * * * vanadium * * *, and articles 
of these metals, including waste and scrap: * * * Vanadium: Waste and 
scrap
     8112.40.6000 Beryllium, * * * vanadium * * *, and articles 
of these metals, including waste and scrap: * * * Vanadium: Other
Ferrovanadium is classified under HTSUS heading 7202.92.00. Although 
the HTSUS subheading is provided for convenience and Customs purposes, 
the Department's written description of the scope of this investigation 
remains dispositive.
    During our review of the petitions, we discussed the scope with the 
petitioners to ensure that it accurately reflects the product for which 
the domestic industry is seeking relief. Moreover, as discussed in the 
preamble to the Department's regulations (62 FR 27323), we are setting 
aside a period for parties to raise issues regarding product coverage. 
The Department encourages all parties to submit such comments by 
January 7, 2002. Comments should be addressed to Import 
Administration's Central Records Unit at Room 1870, U.S. Department of 
Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 
20230. The period of scope consultations is intended to provide the 
Department with ample opportunity to consider all comments and consult 
with parties prior to the issuance of the preliminary determinations.

Determination of Industry Support for the Petition

    Section 771(4)(A) of the Act defines the ``industry'' as the 
producers of a domestic like product. Thus, to determine whether the 
petition has the requisite industry support, the statute directs the 
Department to look to producers and workers who produce the domestic 
like product. The United States International Trade Commission (ITC), 
which is responsible for determining whether ``the domestic industry'' 
has been injured, must also determine what constitutes a domestic like 
product in order to define the industry. While both the Department and 
the ITC must apply the same statutory definition regarding domestic 
like product (see section 771(10) of the Act), they do so for different 
purposes and pursuant to their separate and distinct authority. In 
addition, the Department's determination is subject to limitations of 
time and information. Although this may result in different definitions 
of the like product, such differences do not render the decision of 
either agency contrary to the law.\1\
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    \1\ See Algoma Steel Corp. Ltd., v. United States, 688 F. Supp. 
639, 642-44 (CIT 1988); High Information Content Flat Panel Displays 
and Display Glass Therefore from Japan: Final Determination; 
Rescission of Investigation and Partial Dismissal of Petition, 56 FR 
32376, 32380-81 (July 16, 1991).

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[[Page 66399]]

    Section 771(10) of the Act defines the domestic like product as ``a 
product which is like, or in the absence of like, most similar in 
characteristics and uses with, the article subject to an investigation 
under this title.'' Thus, the reference point from which the domestic 
like product analysis begins is ``the article subject to an 
investigation,'' i.e., the class or kind of merchandise to be 
investigated, which normally will be the scope as defined in the 
petition.
    In this petition, petitioners do not offer a definition of domestic 
like product distinct from the scope of these investigations. Thus, 
based on our analysis of the information presented to the Department by 
petitioners, and the information obtained and received independently by 
the Department, we have determined that there is a single domestic like 
product, which is defined in the Scope of Investigations section above, 
and have analyzed industry support in terms of this domestic like 
product.
    Section 732(b)(1) of the Act requires that a petition be filed on 
behalf of domestic industry. Section 732(c)(4)(A) of the Act provides 
that a petition meets this requirement if the domestic producers or 
workers who support the petition account for: (1) at least 25 percent 
of the total production of the domestic like product; and (2) more than 
50 percent of the production of the domestic like product produced by 
that portion of the industry expressing support for, or opposition to, 
the petition. Information contained in the petition demonstrates that 
the domestic producers or workers who support the petition account for 
over 50 percent of total production of the domestic like product. 
Therefore, the domestic producers or workers who support the petitions 
account for at least 25 percent of the total production of the domestic 
like product, and the requirements of section 732(c)(4)(A)(i) are met. 
See the Import Administration AD Investigation Checklist, dated 
December 17, 2001 (Initiation Checklist) (public version on file in the 
Central Records Unit of the Department of Commerce, Room B-099). 
Furthermore, because the Department received no opposition to the 
petitions, the domestic producers or workers who support the petitions 
account for more than 50 percent of the production of the domestic like 
product produced by that portion of the industry expressing support for 
or opposition to the petitions. See Initiation Checklist. Thus, the 
requirements of section 732(c)(4)(A)(i)(ii) are met.
    Accordingly, the Department determines that the petition was filed 
on behalf of the domestic industry within the meaning of section 
732(b)(1) of the Act. See Initiation Checklist.

Export Price and Normal Value

    The following are descriptions of the allegations of sales at less 
than fair value upon which the Department has based its decision to 
initiate these investigations. The sources of data for the deductions 
and adjustments relating to home market price, U.S. price, constructed 
value (CV) and factors of production (FOP) are detailed in the 
Initiation Checklist.
    The anticipated period of investigation (POI) for the PRC, a non-
market economy (NME) country is April 1, 2001 through September 30, 
2001, while the anticipated POI for South Africa, a market economy 
country, is October 1, 2000 through September 30, 2001. The petitioners 
requested that the Department, pursuant to section 351.204(b)(1) of the 
Department's regulations, extend the POI for South Africa to include 
October 2001, thus creating a thirteen-month POI. According to the 
petitioners, the Department should grant this extension because of 
``particularly aggressive pricing'' by South African producers during 
October 2001.
    We have denied the petitioners request for a thirteen-month POI. 
Although the petitioners are correct that section 351.204(b)(1) does 
provide the Department the authority to examine any period it considers 
appropriate, in practice we have departed from the normal POI in 
relatively few instances either before or after the passage of the 
URAA.\2\ The Department's regulations provide for a twelve-month POI in 
market economy cases, and without sufficient demonstration that the 
Department's analysis would be improved by expanding the POI, we 
analyze sales made during this period. For purposes of this initiation, 
we find that the petitioners have not sufficiently demonstrated that 
use of the extended POI would improve the Department's analysis. 
Indeed, upon examination of the three U.S. price quotes from October 
2001, we note that one of the quotes is actually higher than the price 
quote from within the POI. Furthermore, although the other two prices 
are below the price quote from within the POI, we do not find this 
level of pricing by South African producers to be significantly more 
aggressive than the level of pricing experienced during the POI. 
Because there is no evidence in the petition to demonstrate that 
expanding the POI would otherwise improve our analysis, thereby 
warranting an extension of the POI, we will utilize the normal POI of 
October 1, 2000, through September 30, 2001, for this investigation.
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    \2\ In EMD from Ireland, the Department explained the 
circumstances in which it would alter the normal POI. Specifically, 
the Department explained that expansion of the POI may be warranted 
in cases where the normal POI does not reflect the sales practices 
of the firms subject to investigation, including the following 
situations: (1) Where sales were made pursuant to long-term 
contracts; (2) where distortions would have occurred as a result of 
``seasonally-affected sales;'' (3) where there are special order or 
customized sales; and (4) where sales activity was unusually 
depressed resulting in too few sales for an adequate investigation. 
See Electrolytic Manganese Dioxide From Ireland: Final Determination 
of No Sales at Less Than Fair Value, 54 FR 8776 (Mar. 2, 1989). 
Additionally, in Pure Magnesium from the Russian Federation, certain 
respondents requested that the Department extend the POI to cover 
shipments of pure magnesium made pursuant to long-term contracts 
signed prior to the POI. However, based on the arguments and 
evidence presented on this issue, the Department believed it was not 
appropriate to extend the POI in this investigation and continued to 
use the six-month period defined by 19 CFR 351.204(b)(1) for 
proceedings involving non-market economies. See Notice of 
Preliminary Determination of Sales at Not Less Than Fair Value: Pure 
Magnesium From the Russian Federation, 66 FR 21319, 21321 (Apr. 30, 
2001), followed in Notice of Final Determination of Sales at Not 
Less Than Fair Value: Pure Magnesium From the Russian Federation, 66 
FR 49347, 49348 (Sept. 27, 2001).
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    Regarding an investigation involving a NME, the Department 
presumes, based on the extent of central government control in a NME, 
that a single dumping margin, should there be one, is appropriate for 
all NME exporters in the given country. See, e.g., Final Determination 
of Sales at Less Than Fair Value: Silicon Carbide from the PRC, 59 FR 
22585 (May 2, 1994). In the course of the investigation of 
ferrovanadium from the PRC, all parties will have the opportunity to 
provide relevant information related to the issue of the PRC's status 
and the granting of separate rates to individual exporters.

People's Republic of China

Export Price

    The petitioners identified the following three companies as 
producers and/or exporters of ferrovanadium from the PRC: Chengde 
Xinghua Vanadium Chemical Company Ltd., Jinzhou Ferroalloy (Group) 
Company Ltd., and Panzhihua Iron & Steel Group. To calculate export 
price (EP), petitioners provided (1) Price quotes from U.S. importers 
and/or distributors to unaffiliated U.S. customers for sales of Chinese 
ferrovanadium, and (2) the average unit value (AUV) calculated from 
import statistics released by the

[[Page 66400]]

Census Bureau. Petitioners calculated the AUV using the quantity and 
value of imports during the POI of ferrovanadium from the PRC, entered 
under HTSUS 7202.92.00.
    The price quotes provided by the petitioners are from a time period 
prior to the POI for the PRC. Because it is the Department's preference 
to use U.S. price data originating during the POI, we did not consider 
these price quotes as a basis for EP.
    Based on information contained in the petition, the Department 
believes that HTSUS 7202.92.00 is the category under which all imports 
of ferrovanadium likely enter and the possibility of a 
misclassification by the U.S. Customs Service is minimal because non-
subject merchandise is entered the United States under different HTSUS 
subheadings. See supplement to the petition (supplemental petition), 
dated December 7, 2001, at 3-6. Moreover, the Department believes that 
the AUV provides a better basis for initiation because the AUV is an 
average price covering the entire POI, while the reported price quotes 
are from a period of time before the POI for the PRC. As a result, we 
relied on the AUV to calculate EP. The petitioners used the ``customs 
value'' of the merchandise and the contained weight of vanadium in its 
AUV calculation. According to the definition provided by the ITC's 
Trade Data Web, the ``customs value'' does not include international 
freight or marine insurance.
    The petitioners calculated a net U.S. price by deducting from the 
AUV foreign inland freight and foreign brokerage and handling. See 
Initiation Checklist.

Normal Value

    The petitioners assert that the PRC is an NME country and no 
determination to the contrary has yet been made by the Department. In 
previous investigations, the Department has determined that the PRC is 
an NME. See Steel Concrete Reinforcing Bars from the People's Republic 
of China; Notice of Final Determination of Sales at Less Than Fair 
Value (Re-Bars from China), 66 FR 33522 (June 22, 2001), and Notice of 
Final Determination of Sales at Less Than Fair Value: Foundry Coke 
Products from the People's Republic of China (Foundry Coke from China), 
66 FR 39487 (July 31, 2001). In accordance with section 771(18)(C)(i) 
of the Act, the presumption of NME status remains in effect until 
revoked by the Department. The presumption of NME status for the PRC 
has not been revoked by the Department and, therefore, remains in 
effect for purposes of the initiation of this investigation. Pursuant 
to section 771(18)(C)(i) of the Act, because the PRC's status as an NME 
remains in effect, the petitioners determined the dumping margin using 
an FOP analysis.
    For normal value (NV), the petitioners based the FOP, as defined by 
section 773(c)(3) of the Act, on the consumption rates of one U.S. 
ferrovanadium producer, adjusted for known differences in production 
efficiencies on the basis of available information. The petitioners 
assert that information regarding the Chinese producers' consumption 
rates is not available, and have therefore assumed, for purposes of the 
petition, that producers in the PRC use the same inputs in the same 
quantities as the petitioners use, except where a variance from the 
petitioners' cost model can be justified on the basis of available 
information. Based on the information provided by the petitioners, we 
believe that the petitioners' FOP methodology represents information 
reasonably available to the petitioners and is appropriate for purposes 
of initiating this investigation.
    Pursuant to section 773(c) of the Act, the petitioners assert that 
South Africa is the most appropriate surrogate country for the PRC, 
claiming that South Africa is: (1) A market economy; (2) a significant 
producer of comparable merchandise; and (3) at a level of economic 
development comparable to the PRC in terms of per capita gross national 
product (GNP). The Department's regulations state that it will place 
primary emphasis on per capita GNP in determining whether a given 
market economy is at a level of economic development comparable to the 
NME country. In recent antidumping cases involving the PRC, the 
Department identified a group of countries at a level of economic 
development comparable to the PRC based primarily on per capita GNP. 
This group includes India, Pakistan, Indonesia, Sri Lanka, the 
Philippines, and Egypt. None of these countries are significant 
producers of ferrovanadium. The petitioners assert that there is no 
other product that can be considered ``comparable'' with ferrovanaduim. 
See supplemental petition, at 6-10. Based on information reasonably 
available to the Department, we have accepted this claim for purposes 
of initiation. Since the recent surrogate countries for the PRC do not 
produce ferrovanadium or products comparable to ferrovanadium, another 
surrogate country must be chosen.
    Where the countries normally considered at a level of economic 
development similar to that of the country in question do not produce 
comparable merchandise, the Department's practice is to find the most 
comparable surrogate country that is a significant producer of 
comparable merchandise. The petitioners submit that South Africa is the 
most appropriate surrogate market economy for purposes of this 
investigation because it is a significant producer of ferrovanadium 
and, among the countries that produce ferrovanadium, it is at a level 
of economic development closest to the PRC.
    Based on the information provided by the petitioners, we believe 
that the petitioners' use of South Africa as a surrogate country is 
appropriate for purposes of initiating this investigation.
    In accordance with section 773(c)(4) of the Act, petitioners valued 
FOP, where possible, on reasonably available, public surrogate data 
from South Africa. Materials were valued based on South African import 
values, as published by World Trade Atlas. With respect to vanadium 
pentoxide, however, the petitioners asserted that South African import 
data are problematic because these data are dominated by imports into 
South Africa from Australia. The petitioners provided evidence 
indicating that one of the South African producers, Xstrata, imports 
large quantities of vanadium pentoxide from a related party in 
Australia. The petitioners argue that the per-unit price derived from 
South African import data is unreliable because these data include 
transfer prices between Xstrata and its affiliate. To support this 
claim, the petitioners calculated the per-unit price for vanadium 
pentoxide based upon South African import data and Australian export 
data, and found that the unit price from South African import data is 
approximately 40 percent lower than the unit price from Australian 
export data.
    Although this price difference could result from several factors, 
such as differences in the value basis of the data reported by the 
governments of South Africa and Australia or the time lag between 
export from Australia and entry into South Africa, we find that, for 
purposes of initiation, the existence of transfer prices accounting for 
a large portion of the data from which the per-unit price is calculated 
is a valid reason to exclude Australian imports from the surrogate 
value.
    To avoid this possible distortion, the petitioners recommend that 
the Department exclude imports of vanadium pentoxide from Australia 
when calculating the surrogate value for this input. We agree with this 
recommendation. However, because only a very small quantity of vanadium

[[Page 66401]]

pentoxide entered from non-Australian countries during the months of 
the anticipated POI of the PRC case, the unit value resulting from 
these data, for this time period, is aberrational. In contrast, during 
the longer POI for the South Africa case, there are enough imports from 
countries other than Australia to calculate a non-aberrational per-unit 
value. Therefore, we used the per-unit price derived from South African 
import statistics, excluding imports from Australia and covering the 
period October 2000 through September 2001, as the surrogate value to 
be used for this input.
    Labor was valued using the Department's regression-based wage rate 
for the PRC, in accordance with 19 CFR 351.408(c)(3). Electricity was 
valued using South African electricity prices for industrial consumers 
published by the U.S. Department of Energy. For overhead, selling, 
general and administrative (SG&A) expenses and profit, the petitioners 
applied rates derived from the public fiscal year 2000 financial 
statements of a South African ferrovanadium producer that petitioners 
believe to be representative of ferrovanadium producers in South 
Africa. All surrogate values which fell outside the POI were adjusted 
for inflation through the use of an inflation adjustment factor that 
was calculated using South African price data, as published by the 
International Monetary Fund's International Financial Statistics. Based 
on the information provided by the petitioners, we believe that the 
surrogate values represent information reasonably available to the 
petitioners and are acceptable for purposes of initiating this 
investigation.
    Based upon the comparison of EP to NV, the petitioners calculated 
an estimated dumping margin of 91.64 percent.

South Africa

Export Price

    The petitioners identified the following three companies as 
producers and/or exporters of ferrovanadium from South Africa: Highveld 
Steel & Vanadium Corporation Ltd., Vametco Minerals Corporation, and 
Xstrata SA (Pty) Ltd. To calculate EP, the petitioners provided (1) 
four price quotes from U.S. importers and/or distributors to 
unaffiliated U.S. customers for sales of South African ferrovanadium, 
and (2) the AUV calculated from import statistics released by the 
Census Bureau. Petitioners calculated the AUV using the quantity and 
value of imports during the POI of ferrovanadium from the South Africa, 
entered under HTSUS 7202.92.00.
    In the petitioners' discussion concerning the AUV it calculated for 
imports of South African ferrovanadium, the petitioners noted that a 
large portion of imports from South Africa are shipments made by 
Xstrata to its related U.S. importer. Consequently, the petitioners 
state that the prices serving as the foundation of the AUV do not 
accurately reflect arm's length prices to unaffiliated purchasers. The 
petitioners supported this assertion by calculating the AUV of imports 
into the United States from South Africa and comparing the result to 
the AUV calculated from South African export data for exports of 
subject merchandise to the United States. The petitioners found that 
the AUV calculated from U.S. import data is approximately one-third 
higher than the AUV calculated from South African export data. 
According to the petitioners, this large price differential indicates 
the existence of transfer price manipulation by Xstrata and its related 
U.S. importer.
    Although this price differential could result from several factors, 
such as differences in the value basis of the data reported by the 
Census Bureau and the South African government or the time lag between 
export from South Africa and entry into the United States, we find that 
the existence of transfer prices accounting for a large portion of the 
data from which the AUV is calculated is a valid reason to reject the 
AUV as the basis of EP.
    The petitioners also provided four price quotes for sales of South 
African ferrovanadium from U.S. importers and/or distributors to 
unaffiliated customers in the United States. We note that one of the 
price quotes is from within the POI, while the three other price quotes 
are from after the POI for South Africa. Because it is the Department's 
preference to use U.S. price data originating during the POI, we did 
not consider the price quotes from outside the POI. For purposes of 
initiation, we relied upon the price quote from within the POI. This 
price quote was for a sale of South African ferrovanadium, from a U.S. 
distributor to an unaffiliated U.S. customer, on a packed and delivered 
basis.
    The petitioners calculated a net U.S. price by deducting from the 
starting price foreign inland freight, foreign brokerage and handling, 
ocean freight, U.S. customs duty and fees, unloading and handling fees, 
repackaging costs, U.S. inland freight, and a U.S. distributor mark-up. 
See Initiation Checklist.

Normal Value

    The petitioners were unable to obtain specific sales or offers for 
sale of ferrovanadium in South Africa. However, the petitioners 
provided an affidavit from a source familiar with the ferrovanadium 
market in South Africa that states that South African producers 
typically set their home market sales prices no higher than the 
published London Metal Bulletin (LMB) low price for ferrovanadium. 
Because the home market price charged by these companies is no higher 
than this benchmark, the petitioners claim that the LMB low price is a 
conservative number as a reasonable approximation of home market 
prices.
    Although the petitioners provided information that the LMB prices 
are a reasonable approximation of home market prices, they also 
provided information demonstrating reasonable grounds to believe or 
suspect that sales of ferrovanadium in the home market were made at 
prices below the fully absorbed cost of production (COP), within the 
meaning of section 773(b) of the Act, and requested that the Department 
conduct a country-wide sales-below-cost investigation.
    Pursuant to section 773(b)(3) of the Act, COP consists of the cost 
of manufacture (COM), SG&A expenses, and packing. The petitioners 
calculated COM based on their own production experience, adjusted for 
known differences between costs incurred to produce ferrovanadium in 
the United States and South Africa using publicly available data. To 
determine depreciation and SG&A expenses, the petitioners used the 
public unconsolidated fiscal year 2000 financial statements of a South 
African ferrovanadium producer that the petitioners believe to be 
representative of ferrovanadium producers in South Africa. To determine 
interest expenses, the petitioners relied upon amounts reported in the 
public consolidated fiscal year 2000 financial statements of the same 
South African ferrovanadium producer. Based upon the comparison of the 
published LMB low prices to the calculated COP of the product, we find 
reasonable grounds to believe or suspect that sales of the foreign like 
product were made at prices below the COP, within the meaning of 
section 773(b)(2)(A)(i) of the Act. Accordingly, the Department is 
initiating a country-wide cost investigation. See Initiation of Cost 
Investigation section below. See Initiation Checklist. 
    Based on the cost data discussed above, petitioners found that the 
published LMB low prices were below

[[Page 66402]]

COP. Therefore, pursuant to sections 773(a)(4), 773(b) and 773(e) of 
the Act, the petitioners based NV for sales in South Africa on 
constructed value (CV). The petitioners calculated CV using the same 
COM, SG&A, interest, and packing expenses used to compute South African 
home market COP. Consistent with section 773(e)(2) of the Act, the 
petitioners included in CV an amount for profit. The petitioners relied 
upon amounts reported in the same South African ferrovanadium 
producer's public unconsolidated fiscal year 2000 financial statements 
to determine the amount for profit.
    Based upon the comparison of EP to CV, the petitioners calculated 
an estimated dumping margin of 116 percent.

Initiation of Cost Investigation

    As noted above, pursuant to section 773(b) of the Act, the 
petitioners provided information demonstrating reasonable grounds to 
believe or suspect that sales in the home market of South Africa were 
made at prices below the fully absorbed COP and, accordingly, requested 
that the Department conduct a country-wide sales-below-COP 
investigation in connection with the requested antidumping 
investigations for this country. The Statement of Administrative Action 
(SAA), submitted to the U.S. Congress in connection with the 
interpretation and application of the URAA, states that an allegation 
of sales below COP need not be specific to individual exporters or 
producers. SAA, H. Doc. 103-316, Vol. 1, 103d Cong., 2d Session, at 
833(1994). The SAA, at 833, states that ``Commerce will consider 
allegations of below-cost sales in the aggregate for a foreign country, 
just as Commerce currently considers allegations of sales at less than 
fair value on a country-wide basis for purposes of initiating an 
antidumping investigation.''
    Further, the SAA provides that ``new section 773(b)(2)(A) retains 
the current requirement that Commerce have 'reasonable grounds to 
believe or suspect' that below cost sales have occurred before 
initiating such an investigation. 'Reasonable grounds' * * * exist when 
an interested party provides specific factual information on costs and 
prices, observed or constructed, indicating that sales in the foreign 
market in question are at below-cost prices.'' Id. Based upon the 
comparison of the LMB low prices for ferrovanadium to the COP for South 
African producers, we find the existence of ``reasonable grounds to 
believe or suspect'' that sales of foreign like product in South Africa 
were made at prices below their respective COPs within the meaning of 
section 773(b)(2)(A)(i) of the Act. Accordingly, the Department is 
initiating the requested country-wide cost investigation.

Fair Value Comparisons

    Based on the data provided by the petitioners, there is reason to 
believe that imports of ferrovanadium from the PRC and South Africa are 
being, or are likely to be, sold at less than fair value.

Allegations and Evidence of Material Injury and Causation

    The petitioners allege that the U.S. industry producing the 
domestic like product is being materially injured, or is threatened 
with material injury, by reason of the individual and cumulated imports 
of the subject merchandise sold at less than NV. Individually, the 
volume of imports from the PRC and South Africa, using the latest 
available data, exceeded the statutory threshold of seven percent for a 
negligibility exclusion. Therefore, when cumulated, the volumes for 
these two countries also exceed the threshold. See section 
771(24)(A)(ii) of the Act. Petitioners contend that the industry's 
injured condition is evidenced in the declining trends in operating 
profits, decreased U.S. market share, and price suppression and 
depression. The allegations of injury and causation are supported by 
relevant evidence including U.S. Customs import data, domestic 
consumption, and pricing information. We have assessed the allegations 
and supporting evidence regarding material injury and causation, and 
have determined that these allegations are properly supported by 
accurate and adequate evidence and meet the statutory requirements for 
initiation. See Initiation Checklist.

Initiation of Antidumping Investigations

    Based on our examination of the petition on ferrovanadium, and the 
petitioners' response to our supplemental questionnaire clarifying the 
petition, we find that the petition meets the requirements of section 
732 of the Act. See Initiation Checklist. Therefore, we are initiating 
antidumping duty investigations to determine whether imports of 
ferrovanadium from the PRC and South Africa are being, or are likely to 
be, sold in the United States at less than fair value. Unless this 
deadline is extended, we will make our preliminary determinations no 
later than 140 days after the date of this initiation.

Distribution of Copies of the Petitions

    In accordance with section 732(b)(3)(A) of the Act, a copy of the 
public version of the petition has been provided to the representatives 
of the governments of the PRC and South Africa. We will attempt to 
provide a copy of the public version of the petition to each exporter 
named in the petition, as appropriate.

International Trade Commission Notification

    We have notified the ITC of our initiations, as required by section 
732(d) of the Act.

Preliminary Determinations by the ITC

    The ITC will determine, no later than January 10, 2002 whether 
there is a reasonable indication that imports of ferrovanadium from the 
PRC and South Africa are causing material injury, or threatening to 
cause material injury, to a U.S. industry. A negative ITC determination 
for any country will result in the investigation being terminated with 
respect to that country; otherwise, these investigations will proceed 
according to statutory and regulatory time limits.
    This notice is issued and published pursuant to section 777(i) of 
the Act.

    Dated: December 17, 2001.
Bernard T. Carreau,
Acting Assistant Secretary for Import Administration.
[FR Doc. 01-31643 Filed 12-21-01; 8:45 am]
BILLING CODE 3510-DS-P