[Federal Register Volume 73, Number 59 (Wednesday, March 26, 2008)]
[Notices]
[Pages 15988-15995]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-6165]


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DEPARTMENT OF COMMERCE

International Trade Administration

A-570-919


Electrolytic Manganese Dioxide from the People's Republic of 
China: Preliminary Determination of Sales at Less Than Fair Value and 
Postponement of Final Determination

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

EFFECTIVE DATE: March 26, 2008.
SUMMARY: We preliminarily determine that electrolytic manganese dioxide 
(``EMD'') from the People's Republic of China (``PRC'') is being, or is 
likely to be, sold in the United States at less than fair value 
(``LTFV''), as provided in section 733 of the Tariff Act of 1930, as 
amended (``the Act''). The estimated margins of sales at LTFV are shown 
in the ``Preliminary Determination'' section of this notice. Pursuant 
to a request from an interested party, we are postponing the final 
determination and extending the provisional measures from a four-month 
period to not more than six months. Accordingly, we will make our final 
determination not later than 135 days after publication of the 
preliminary determination.

FOR FURTHER INFORMATION CONTACT: Eugene Degnan or Robert Bolling, AD/
CVD Operations, Office 8, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution

[[Page 15989]]

Avenue, NW, Washington, DC, 20230; telephone: (202) 482-0414 or 482-
3434, respectively.

SUPPLEMENTARY INFORMATION:

Case History

    On August 22, 2007, Tronox LLC (``Tronox'' or ``Petitioner''), 
filed a petition in proper form on behalf of the domestic industry, 
concerning imports of EMD from the PRC (``Petition''). The Department 
of Commerce (``the Department'') initiated this investigation on 
September 11, 2007.\1\ In the Notice of Initiation, the Department 
applied a process by which exporters and producers may obtain separate-
rate status in non-market economy (``NME'') investigations. The process 
requires exporters and producers to submit a separate-rate status 
application (``SRA'').\2\ However, the standard for eligibility for a 
separate rate (which is whether a firm can demonstrate an absence of 
both de jure and de facto government control over its export 
activities) has not changed. The SRA for this investigation was posted 
on the Department's website http://ia.ita.doc.gov/ia-highlights-and-news.html on September 19, 2007. The due date for filing an SRA was 
November 9, 2007. No party filed an SRA in this investigation.
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    \1\ See Notice of Initiation of Antidumping Duty Investigations: 
Electrolytic Manganese Dioxide from Australia and the People's 
Republic of China, 72 FR 52850 (September 17, 2007) (``Notice of 
Initiation'').
    \2\ See Policy Bulletin 05.1: Separate-Rates Practice and 
Application of Combination Rates in Antidumping Investigations 
involving Non-Market Economy Countries (April 5, 2005) (``Policy 
Bulletin 05.1''), available at http://ia.ita.doc.gov/policy/bull05-1.pdf.
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    On September 25, 2007, we sent a letter to interested parties 
requesting comments regarding the physical characteristics to be used 
in our Questionnaire. On October 9, 2007, Petitioner submitted 
comments. No other party submitted comments.
    On October 18, 2007, the United States International Trade 
Commission (``ITC'') issued its affirmative preliminary determination 
that there is a reasonable indication that an industry in the United 
States is materially injured by reason of imports of EMD from the 
PRC.\3\
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    \3\ See Investigation Nos. 731-TA-1124 and1125 (Preliminary): 
Electrolytic Manganese Dioxide from Australia and China, 72 FR 60388 
(October 24, 2007).
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    On October 16, 2007, the Department issued its respondent selection 
memorandum, selecting Guizhou Redstar Developing Import and Export 
Company, Ltd. (``Redstar'') and Xiangtan Electrochemical Scientific 
Ltd. (``Xiangtan'') as mandatory respondents in this investigation.\4\ 
On November 6, 2007, the Department issued an antidumping duty 
questionnaire to the two above-named mandatory respondents. On November 
27, 2007, Xiangtan submitted a letter to the Department stating that it 
would not participate in the investigation.
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    \4\ See Memorandum to Wendy Frankel, ``Respondent Selection 
Memorandum: Antidumping Duty Investigation of Electrolytic Manganese 
Dioxide from the People's Republic of China'' (October 16, 2007) 
(``Respondent Selection Memorandum''). See also ``Selection of 
Respondents'' section below.
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    On November 28, 2007, the Department requested that the Office of 
Policy provide a list of surrogate countries for this investigation.\5\ 
On December 5, 2007, Redstar submitted its Section A response. On 
December 20, 2007, the Office of Policy issued its list of surrogate 
countries.\6\ On December 28, 2007, Redstar submitted its Sections C 
and D responses. On January 15, 2008, subsequent to a request from 
Petitioner submitted on December 31, 2007, the Department extended the 
time period for issuing the preliminary determination by 50 days.\7\ On 
January 23, 2008, the Department released a letter to interested 
parties requesting comments on the appropriate surrogate country to use 
in this investigation and for publicly available information to value 
factors of production (``FOP''). On February 6, 2008, Petitioner 
submitted comments on surrogate country selection. On February 20, 
2008, both Petitioner and Redstar submitted publicly available 
information to value FOPs.
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    \5\ See Memorandum to Ron Lorentzen, Director, Office of Policy, 
``Less-Than-Fair-Value Investigation of Electrlytic Manganese 
Dioxide from the People's Republic of China (`PRC'), Surrogate 
Country Selection List'' (November 28, 2007).
    \6\ See Memorandum from Ron Lorentzen, Director, Office of 
Policy, ``Antidumping Duty Investigation of Electrolytic Manganese 
Dioxide from the People's Republic of China (`PRC'): Request for a 
List of Surrogate Countries'' (December 20, 2007) (``Surrogate 
Countries Memorandum'').
    \7\ See Postponement of Preliminary Determinations of 
Antidumping Duty Investigations: Electrolytic Manganese Dioxide from 
Australia and the People's Republic of China, 73 FR 2445(January 15, 
2008).
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Period of Investigation

    The period of investigation (``POI'') is January 1, 2007, through 
June 30, 2007. This period corresponds to the two most recent fiscal 
quarters prior to the month of the filing of the petition, which was 
September 2007.\8\
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    \8\ See 19 CFR 351.204(b)(1).
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Scope of Investigation

    The merchandise covered by this investigation includes all 
manganese dioxide (MnO2) that has been manufactured in an 
electrolysis process, whether in powder, chip, or plate form. Excluded 
from the scope are natural manganese dioxide (NMD) and chemical 
manganese dioxide (CMD). The merchandise subject to this investigation 
is classified in the Harmonized Tariff Schedule of the United States 
(``HTSUS'') at subheading 2820.10.00.00. While the HTSUS subheading is 
provided for convenience and customs purposes, the written description 
of the scope of this investigation is dispositive.

Scope Comments

    In accordance with the preamble to our regulations,\9\ in our 
initiation notice, we set aside a period of time for parties to raise 
issues regarding product coverage and encouraged all parties to submit 
comments within 20 calendar days of publication of the initiation 
notice. No party submitted comments on the scope of this investigation.
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    \9\ See Antidumping Duties; Countervailing Duties, 62 FR 27296, 
27323 (May 19, 1997).
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Selection of Respondents

    Section 777A(c)(1) of the Act directs the Department to calculate 
individual weighted-average dumping margins for each known exporter and 
producer of the subject merchandise. Section 777A(c)(2) of the Act 
gives the Department discretion, when faced with a large number of 
exporters/producers, to limit its examination to a reasonable number of 
such companies if it is not practicable to examine all companies. Where 
it is not practicable to examine all known producers/exporters of 
subject merchandise, this provision permits the Department to 
investigate either (1) a sample of exporters, producers, or types of 
products that is statistically valid based on the information available 
to the Department at the time of selection or (2) exporters/producers 
accounting for the largest volume of the merchandise under 
investigation that can reasonably be examined. After consideration of 
the complexities expected to arise in this proceeding and the resources 
available to it, the Department determined that it was not practicable 
in this investigation to examine all known producers/exporters of 
subject merchandise. We determined we had the resources to examine two 
exporters. We further determined to limit our examination to the two 
exporters accounting for the largest volume of the subject merchandise 
pursuant to section 777A(c)(2)(B) of the Act. Our analysis indicates 
that Redstar and Xiangtan are the two largest PRC exporters of subject

[[Page 15990]]

merchandise by weight, and account for a significant percentage of all 
exports of the subject merchandise from the PRC during the POI. As a 
result, we selected these entities as the mandatory respondents in this 
investigation.\10\
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    \10\ See Respondent Selection Memorandum.
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Non-Market Economy Country

    For purposes of initiation, Petitioner submitted an LTFV analysis 
for the PRC as an NME.\11\ The Department considers the PRC an NME.\12\ 
In accordance with section 771(18)(C)(i) of the Act, any determination 
that a foreign country is an NME shall remain in effect until revoked 
by the administering authority.\13\ No party has challenged the 
designation of the PRC as an NME country in this investigation. 
Therefore, we continue to treat the PRC as an NME country for purposes 
of this preliminary determination.
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    \11\ See Notice of Initiation, 72 FR at 52853.
    \12\ See, e.g., Preliminary Determination of Sales at Less Than 
Fair Value and Postponement of Final Determination: Coated Free 
Sheet Paper from the People's Republic of China, 72 FR 30758, 30760 
(June 4, 2007), unchanged in the Final Determination of Sales at 
Less Than Fair Value: Coated Free Sheet Paper from the People's 
Republic of China, 72 FR 60632 (October 25, 2007).
    \13\ See, e.g., Final Determination of Sales at Less Than Fair 
Value: Certain Artist Canvas from the People's Republic of China, 71 
FR 16116 (March 30, 2006) (``Artist Canvas'').
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Surrogate Country

    When the Department is investigating imports from an NME country, 
section 773(c)(1) of the Act directs it to base normal value (``NV'') 
on the NME producer's FOPs. The Act further instructs the Department to 
value FOPs based on the best available information in a surrogate 
market economy country or countries considered to be appropriate by the 
Department.\14\ When valuing the FOPs, the Department shall utilize, to 
the extent possible, the prices or costs of FOPs in one or more market 
economy countries that are: (1) at a level of economic development 
comparable to that of the NME country; and (2) significant producers of 
comparable merchandise.\15\ Further, the Department normally values all 
FOPs in a single surrogate country.\16\ The sources of the surrogate 
values (``SV'') are discussed under the ``Normal Value'' section below 
and in the Memorandum to the File, Surrogate Value Memorandum, dated 
March 19, 2008, which is on file in the Central Records Unit, Room 1117 
of the main Department building.
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    \14\ See Section 773(c)(1) of the Act.
    \15\ See Section 773(c)(4) of the Act.
    \16\ See 19 CFR 351.408(c)(2).
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    The Department determined that India, Indonesia, the Philippines, 
Colombia and Thailand are countries comparable to the PRC in terms of 
economic development.\17\ Once the economically comparable countries 
have been identified, we select an appropriate surrogate country by 
determining whether one of these countries is a significant producer of 
comparable merchandise and whether the data for valuing FOPs is both 
available and reliable.
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    \17\ See Surrogate Countries Memorandum.
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    We have determined it appropriate to use India as a surrogate 
country pursuant to section 773(c)(4) of the Act based on the 
following: (A) India is at a level of economic development comparable 
to that of the PRC, and (B) India is a significant producer of 
comparable merchandise. Furthermore, we have reliable data from India 
that we can use to value the FOPs.\18\ Thus, we have calculated NV 
using Indian prices when available and appropriate to value Redstar's 
FOPs. We have obtained and relied upon publicly available information 
wherever possible.\19\
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    \18\ Id. at 2.
    \19\ See Memorandum to Wendy J. Frankel, ``Electrolytic 
Manganese Dioxide from the People's Republic of China: Surrogate 
Value Memorandum'' (March 19, 2008) (``Surrogate Value 
Memorandum'').
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    In accordance with 19 CFR 351.301(c)(3)(i), for the final 
determination in an antidumping investigation, interested parties may 
submit within 40 days after the date of publication of the preliminary 
determination publicly available information to value the FOPs.\20\
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    \20\ In accordance with 19 CFR 351.301(c)(1), for the final 
determination of this investigation, interested parties may submit 
factual information to rebut, clarify, or correct factual 
information submitted by an interested party less than ten days 
before, on, or after the applicable deadline for submission of such 
factual information. However, the Department notes that 19 CFR 
351.301(c)(1) permits new information only insofar as it rebuts, 
clarifies, or corrects information recently placed on the record. 
The Department generally cannot accept the submission of additional, 
previously absent-from-the-record alternative SV information 
pursuant to 19 CFR 351.301(c)(1). See Glycine from the People's 
Republic of China: Final Results of Antidumping Duty Administrative 
Review and Final Rescission, in Part, 72 FR 58809 (October 17, 2007) 
and accompanying Issues and Decision Memorandum at Comment 2.
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Separate Rates

    In proceedings involving NME countries, the Department has a 
rebuttable presumption that all companies within the country are 
subject to government control and thus should be assessed a single 
antidumping duty rate. It is the Department's policy to assign all 
exporters of merchandise subject to investigation in an NME country 
this single rate unless an exporter can demonstrate that it is 
sufficiently independent so as to be entitled to a separate rate. 
Exporters can demonstrate this independence through the absence of both 
de jure and de facto government control over export activities. The 
Department analyzes each entity exporting the subject merchandise under 
a test arising from 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 further developed 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'').\21\ However, if the Department determines that a company is 
wholly foreign-owned or located in a market economy, then a separate-
rate analysis is not necessary to determine whether it is independent 
from government control. No companies in this investigation reported 
that they are wholly owned by individuals or companies located in a 
market-economy country and no companies reported that they are located 
outside the PRC.
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    \21\ See also Policy Bulletin 05.1 at 6, which states: `` 
[lsqb]w[rsqb]hile continuing the practice of assigning separate 
rates only to exporters, all separate rates that the Department will 
now assign in its NME investigations will be specific to those 
producers that supplied the exporter during the period of 
investigation. Note, however, that one rate is calculated for the 
exporter and all of the producers which supplied subject merchandise 
to it during the period of investigation. This practice applies both 
to mandatory respondents receiving an individually calculated 
separate rate as well as the pool of non-investigated firms 
receiving the weighted-average of the individually calculated rates. 
This practice is referred to as the application of ``combination 
rates' because such rates apply to specific combinations of 
exporters and one or more producers. The cash-deposit rate assigned 
to an exporter will apply only to merchandise both exported by the 
firm in question and produced by a firm that supplied the exporter 
during the period of investigation.''
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    The sole participating company in this investigation, Redstar, 
stated that it is a wholly PRC-owned company. Therefore, the Department 
must analyze whether Redstar can demonstrate the absence of both de 
jure and de facto government control over export activities.

a. Absence of De Jure Control

    The Department considers the following de jure criteria in 
determining whether an individual company may be granted a separate 
rate: (1) An absence of restrictive stipulations associated with an 
individual exporter's business and export licenses; (2) any legislative 
enactments decentralizing control of companies; and (3) other formal 
measures by the government decentralizing control of companies.\22\
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    \22\ See Sparklers, 56 FR at 20589.

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[[Page 15991]]

    The evidence provided by Redstar supports a preliminary finding of 
de jure absence of government control based on the following: (1) an 
absence of restrictive stipulations associated with the individual 
exporters' business and export licenses; (2) there are applicable 
legislative enactments decentralizing control of the companies; and (3) 
there are formal measures by the government decentralizing control of 
companies.\23\
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    \23\ See Redstar's Section A Questionnaire Response, dated 
December 5, 2007.
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b. Absence of De Facto Control

    Typically the Department considers four factors in evaluating 
whether each respondent is subject to de facto government control of 
its export functions: (1) Whether the export prices are set by or are 
subject to the approval of a government agency; (2) whether the 
respondent has authority to negotiate and sign contracts and other 
agreements; (3) whether the respondent has autonomy from the government 
in making decisions regarding the selection of management; and (4) 
whether the respondent retains the proceeds of its export sales and 
makes independent decisions regarding disposition of profits or 
financing of losses.\24\ The Department has determined that an analysis 
of de facto control is critical in determining whether respondents are, 
in fact, subject to a degree of government control which would preclude 
the Department from assigning separate rates. We determine for Redstar 
that the evidence on the record supports a preliminary finding of de 
facto absence of government control based on record statements and 
supporting documentation showing the following: (1) Redstar sets its 
own export prices independent of the government and without the 
approval of a government authority; (2) Redstar retains the proceeds 
from its sales and makes independent decisions regarding disposition of 
profits or financing of losses; (3) Redstar has the authority to 
negotiate and sign contracts and other agreements; and (4) Redstar has 
autonomy from the government regarding the selection of management.\25\
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    \24\ See Silicon Carbide, 59 FR at 22586-87; see also Notice of 
Final Determination of Sales at Less Than Fair Value: Furfuryl 
Alcohol From the People's Republic of China, 60 FR 22544, 22545 (May 
8, 1995).
    \25\ See Redstar's Section A Questionnaire Response, dated 
December 5, 2007.
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    The evidence placed on the record of this investigation by Redstar 
demonstrates an absence of de jure and de facto government control with 
respect to each its exports of the merchandise under investigation, in 
accordance with the criteria identified in Sparklers and Silicon 
Carbide.

Application of Facts Available

    Section 776(a)(1) and (2) of the Act provides that the Department 
shall apply ``facts otherwise available'' if, inter alia, necessary 
information is not on the record or an interested party or any other 
person (A) withholds information that has been requested, (B) fails to 
provide information within the deadlines established, or in the form 
and manner requested by the Department, subject to subsections (c)(1) 
and (e) of section 782, (C) significantly impedes a proceeding, or (D) 
provides information that cannot be verified as provided by section 
782(i) of the Act.
    Where the Department determines that a response to a request for 
information does not comply with the request, section 782(d) of the Act 
provides that the Department will so inform the party submitting the 
response and will, to the extent practicable, provide that party the 
opportunity to remedy or explain the deficiency. If the party fails to 
remedy the deficiency within the applicable time limits and subject to 
section 782(e) of the Act, the Department may disregard all or part of 
the original and subsequent responses, as appropriate. Section 782(e) 
of the Act provides that the Department ``shall not decline to consider 
information that is submitted by an interested party and is necessary 
to the determination but does not meet all applicable requirements 
established by the administering authority'' if the information is 
timely, can be verified, is not so incomplete that it cannot be used, 
and if the interested party acted to the best of its ability in 
providing the information. Where all of these conditions are met, the 
statute requires the Department to use the information supplied if it 
can do so without undue difficulties.
    Section 776(b) of the Act further provides that the Department may 
use an adverse inference in applying the facts otherwise available when 
a party has failed to cooperate by not acting to the best of its 
ability to comply with a request for information. Such an adverse 
inference may include reliance on information derived from the 
petition, the final determination, a previous administrative review, or 
other information placed on the record.\26\
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    \26\ See 19 CFR 351.308(c).
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Application of Total Adverse Facts Available

The PRC-Wide Entity

    On October 16, 2007, we selected Xiangtan as one of the mandatory 
respondents. On November 6, 2007, we issued our questionnaire to 
Xiangtan. On November 27, 2007, Xiangtan 1) stated it will not 
participate in this investigation through the submission of 
questionnaire responses, 2) stated that it had shredded and/or erased 
all submissions containing business proprietary information, and 3) 
requested to be removed from the APO service list. Thus, there is no 
information on the record of this investigation with respect to 
Xiangtan. Because Xiangtan was selected as a mandatory respondent and 
failed to demonstrate its eligibility for separate-rate status, it 
remains subject to this investigation as part of the PRC-wide entity.
    Pursuant to section 776(a) of the Act, we further find that because 
the PRC-wide entity (including Xiangtan) failed to respond to the 
Department's questionnaires, withheld or failed to provide information 
in a timely manner or in the form or manner requested by the 
Department, and otherwise impeded the proceeding, it is appropriate to 
apply a dumping margin for the PRC-wide entity using the facts 
otherwise available on the record. Additionally, because this party 
failed to cooperate by refusing to respond to our requests for 
information, we find an adverse inference is appropriate pursuant to 
section 776(b) of the Act for the PRC-wide entity.

Selection of the Adverse Facts Available Rate

    In sum, because the PRC-wide entity failed to respond to our 
request for information, it has failed to cooperate to the best of its 
ability. Therefore, the Department preliminarily finds that, in 
selecting from among the facts available, an adverse inference is 
appropriate pursuant to section 776(b) of the Act for the PRC-wide 
entity.
    Further, section 776(b) of the Act authorizes the Department to use 
as adverse facts available (``AFA'') information derived from the 
petition, the final determination from the LTFV investigation, a 
previous administrative review, or any other information placed on the 
record. In selecting a rate for AFA, the Department selects a rate that 
is sufficiently adverse ``as to effectuate the purpose of the facts 
available rule to induce respondents to provide the Department with 
complete and accurate

[[Page 15992]]

information in a timely manner.''\27\ Moreover, the Department will 
select a rate that ensures ``that the party does not obtain a more 
favorable result by failing to cooperate than if it had cooperated 
fully.''\28\
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    \27\ See Notice of Final Determination of Sales at Less than 
Fair Value: Static Random Access Memory Semiconductors From Taiwan, 
63 FR 8909, 8932 (February 23, 1998).
    \28\ See Statement of Administrative Action at 870. See also, 
Brake Rotors From the People's Republic of China: Final Results and 
Partial Rescission of the Seventh Administrative Review; Final 
Results of the Eleventh New Shipper Review, 70 FR 69937, 69939 
(November 18, 2005).
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    It is the Department's practice to select, as AFA, the higher of 
the (a) highest margin alleged in the petition, or (b) the highest 
calculated rate of any respondent in the investigation.\29\ In the 
instant investigation, as AFA, we have assigned to the PRC-wide entity 
a margin of 236.81 percent, the highest calculated rate on the record 
of this proceeding, which is the calculated rate assigned to Redstar. 
The Department preliminarily determines that this information is the 
most appropriate from the available sources to effectuate the purposes 
of AFA.
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    \29\ See Final Determination of Sales at Less Than Fair Value: 
Certain Cold-Rolled Carbon Quality Steel Products from the People's 
Republic of China, 65 FR 34660 (May 21, 2000), and accompanying 
Issues and Decision Memorandum at ``Facts Available.''
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    Consequently, we are applying a single antidumping rate - the PRC-
wide rate - to all exporters which did not demonstrate entitlement to a 
separate rate, i.e., all exporters other than Redstar. The Department 
will consider all margins on the record at the time of the final 
determination for the purpose of determining the most appropriate final 
PRC-wide margin.\30\
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    \30\ See Notice of Preliminary Determination of Sales at Less 
Than Fair Value: Saccharin from the People's Republic of China, 67 
FR 79049, 79054 (December 27, 2002).
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Fair Value Comparisons

    To determine whether sales of EMD to the United States by Redstar 
were made at LTFV, we compared Export Price (``EP'') to NV, as 
described in the ``Export Price'' and ``Normal Value'' sections of this 
notice.

Export Price

    In accordance with section 772(a) of the Act, EP is the price at 
which the subject merchandise is first sold (or agreed to be sold) 
before the date of importation by the producer or exporter of the 
subject merchandise outside of the United States to an unaffiliated 
purchaser in the United States or to an unaffiliated purchaser for 
exportation to the United States, as adjusted under section 772(c) of 
the Act. In accordance with section 772(a) of the Act, we used EP for 
Red Star because the subject merchandise was sold directly to the 
unaffiliated customers in the United States prior to importation and 
because constructed export price was not otherwise warranted.
    We calculated EP based on the packed cost and freight or delivered 
prices to unaffiliated purchasers in, or for exportation to, the United 
States. We made deductions, as appropriate, for any movement expenses 
(foreign inland freight from the plant to the warehouse, domestic 
brokerage, and international freight) and a discount in accordance with 
section 772(c)(2)(A) of the Act.\31\
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    \31\ For a detailed description of all adjustments, see 
Memorandum to the File, ``Electrolytic Manganese Dioxide from the 
People's Republic of China: Analysis Memorandum for the Preliminary 
Determination: Guizhou Redstar Developing Import and Export Company 
Ltd. (March 19, 2008) (``Redstar's Preliminary Analysis 
Memorandum'').
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Normal Value

    We compared NV to weighted-average EPs in accordance with section 
777A(d)(1) of the Act. Further, section 773(c)(1) of the Act provides 
that the Department shall determine the NV using a FOP methodology if 
the merchandise is exported from an NME and 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 bases NV on the FOPs because the presence of government 
controls on various aspects of NMEs renders price comparisons and the 
calculation of production costs invalid under its normal methodologies. 
The Department's questionnaire requires that the respondent provide 
information regarding the weighted-average FOPs across all of the 
company's plants that produce the subject merchandise, not just the 
FOPs from a single plant. This methodology ensures that the 
Department's calculations are as accurate as possible.\32\ The 
Department calculated the FOPs using the weighted-average factor values 
for all of the facilities involved in producing the subject merchandise 
for the exporter. The Department calculated NV for each matching 
control number (``CONNUM'') based on the FOPs reported from the 
exporter's supplier.
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    \32\ See, e.g., Final Determination of Sales at Less Than Fair 
Value and Critical Circumstances: Certain Malleable Iron Pipe 
Fittings From the People's Republic of China, 68 FR 61395 (October 
28, 2003), and accompanying Issues and Decision Memorandum at 
Comment 19.
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Factor Valuations

    In accordance with section 773(c) of the Act, we calculated NV 
based on FOPs reported by the respondent for the POI. To calculate NV, 
we multiplied the reported per-unit factor-consumption rates by 
publicly available Indian SVs. In selecting the SVs, we considered the 
quality, specificity, and contemporaneity of the data. As appropriate, 
we adjusted input prices by including freight costs to make them 
delivered prices. Specifically, we added to Indian import SVs a 
surrogate freight cost using the shorter of the reported distance from 
the domestic supplier to the factory of production or the distance from 
the nearest seaport to the factory of production, where appropriate. 
This adjustment is in accordance with the Federal Circuit's decision in 
Sigma Corp. v. United States, 117 F. 3d 1401, 1407-1408 (Fed. Cir. 
1997). A detailed description of all SVs used can be found in the 
Surrogate Value Memorandum and Redstar's Preliminary Analysis 
Memorandum.
    For this preliminary determination, in accordance with the 
Department's practice, we used import values from the World Trade 
Atlas[reg] online (``Indian Import Statistics''), which were published 
by the Directorate General of Commercial Intelligence and Statistics, 
Ministry of Commerce of India, which were reported in rupees and are 
contemporaneous with the POI to calculate SVs for the mandatory 
respondent's material inputs. Where we found Indian Import Statistics 
to be unavailable or unreliable, we used information from Chemical 
Weekly, an Indian trade publication. In selecting the best available 
information for valuing FOPs in accordance with section 773(c)(1) of 
the Act, the Department's practice is to select, to the extent 
practicable, SVs which are non-export average values, most 
contemporaneous with the POI, product-specific, and tax-exclusive.\33\
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    \33\ See, e.g., Notice of Preliminary Determination of Sales at 
Less Than Fair Value, Negative Preliminary Determination of Critical 
Circumstances and Postponement of Final Determination: Certain 
Frozen and Canned Warmwater Shrimp From the Socialist Republic of 
Vietnam, 69 FR 42672, 42682 (July 16, 2004), unchanged in the final 
determination (Final Determination of Sales at Less Than Fair Value: 
Certain Frozen and Canned Warmwater Shrimp from the Socialist 
Republic of Vietnam, 69 FR 71005 (December 8, 2004)).
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    Redstar reported that its supplier of EMD owns its own manganese 
carbonite mine, and therefore we should value manganese carbonite using 
the FOPs consumed to mine the ore. Our analysis of the relationship 
between Redstar's producer and the mine, however,

[[Page 15993]]

indicates that the producer's and the mine's production are not 
vertically integrated. Therefore, we are valuing manganese carbonite 
using SV methodology.\34\
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    \34\ See Surrogate Value Memorandum.
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    In those instances where we could not obtain publicly available 
information contemporaneous with the POI with which to value FOPs, we 
adjusted the SVs using, where appropriate, the Indian Wholesale Price 
Index, as published in the International Financial Statistics of the 
International Monetary Fund.
    Furthermore, with regard to the Indian import-based SVs, we have 
disregarded import prices that we have reason to believe or suspect may 
be subsidized. We have reason to believe or suspect that prices of 
inputs from Indonesia, South Korea, and Thailand may have been 
subsidized. We have found in other proceedings that these countries 
maintain broadly available, non-industry-specific export subsidies and, 
therefore, it is reasonable to infer that all exports to all markets 
from these countries may be subsidized.\35\ We are also guided by the 
legislative history not to conduct a formal investigation to ensure 
that such prices are not subsidized.\36\ The Department bases its 
decision on information that is available to it at the time it makes 
its determination. Therefore, we have not used prices from these 
countries in calculating the Indian import-based SVs. In addition, we 
excluded Indian import data from NME countries from our SV 
calculations.\37\
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    \35\ See Notice of Final Determination of Sales at Less Than 
Fair Value and Negative Final Determination of Critical 
Circumstances: Certain Color Television Receivers From the People's 
Republic of China, 69 FR 20594 (April 16, 2004), and accompanying 
Issues and Decision Memorandum at Comment 7.
    \36\ See Omnibus Trade and Competitiveness Act of 1988, 
Conference Report to Accompanying H.R. 3, H.R. Rep. 100-576 at 590 
(1988).
    \37\ For a detailed description of all SVs used for each 
respondent, see Surrogate Value Memorandum.
---------------------------------------------------------------------------

    We used Indian transport information to value the inland freight 
cost of the raw materials. The Department determined the best available 
information for valuing truck freight to be from www.infreight.com. 
This source provides daily rates from six major points of origin to 
five destinations in India. The Department obtained a price quote on 
the first day of each month from June 2005 to May 2006 from each point 
of origin to each destination and averaged the data accordingly. We 
adjusted these rates for inflation. We determined the best available 
information for valuing rail freight to be from 
www.indianrailways.gov.in. Consistent with the Department's practice, 
we used two sources to calculate an SV for domestic brokerage 
expenses.\38\ These data were averaged with the February 2004-January 
2005 data contained in the May 24, 2005, public version of Agro Dutch 
Industries Limited's (``Agro Dutch'') response submitted in the 
administrative review of the antidumping duty order on certain 
preserved mushrooms from India.\39\ The brokerage expense data reported 
by Essar Steel and Agro Dutch in their public versions are ranged data. 
The Department first derived an average per-unit amount from each 
source, then adjusted each average rate for inflation. Finally, the 
Department averaged the two per-unit amounts to derive an overall 
average rate for the POI.
---------------------------------------------------------------------------

    \38\ See, e.g., Preliminary Determination of Sales at Less Than 
Fair Value, Affirmative Critical Circumstances, In Part, and 
Postponement of Final Determination: Certain Lined Paper Products 
from the People's Republic of China, 71 FR 19695, 19704 (April 17, 
2006) (utilizing these same two sources), unchanged in the final 
determination ( Notice of Final Determination of Sales at Less Than 
Fair Value, and Affirmative Critical Circumstances, In Part: Certain 
Lined Paper Products from the People's Republic of China, 71 FR 
53079 (September 8, 2006)). The Department averaged December 2003-
November 2004 data contained in the February 28, 2005, public 
version of Essar Steel's response submitted in the antidumping duty 
administrative review of hot-rolled carbon steel flat products from 
India. See also Certain Hot-Rolled Carbon Steel Flat Products From 
India: Preliminary Results of Antidumping Duty Administrative 
Review, 71 FR 2018 (January 12, 2006) , unchanged in the final 
results (Certain Hot-Rolled Carbon Steel Flat Products From India: 
Final Results of Antidumping Duty Administrative Review, 71 FR 40694 
(July 18, 2006)).
    \39\ See Certain Preserved Mushrooms From India: Final Results 
of Antidumping Duty Administrative Review, 70 FR 37757 (June 30, 
2005). See also Surrogate Value Memorandum.
---------------------------------------------------------------------------

    For direct, indirect, and packing labor, consistent with 19 CFR 
351.408(c)(3), we used the PRC regression-based wage rate as reported 
on Import Administration's home page, Import Library, Expected Wages of 
Selected NME Countries, revised in January 2007, available at http://ia.ita.doc.gov/wages/index.html. Because this regression-based wage 
rate does not separate the labor rates into different skill levels or 
types of labor, we have applied the same wage rate to all skill levels 
and types of labor reported by the respondent.\40\ If the NME wage 
rates are updated by the Department prior to issuance of the final 
determination, we will use the updated wage rate in the final LTFV 
determination.
---------------------------------------------------------------------------

    \40\ See Surrogate Value Memorandum.
---------------------------------------------------------------------------

    To value electricity, we used data from the International Energy 
Agency Key World Energy Statistics (2003 edition). Because the value 
was not contemporaneous with the POI, we adjusted the rate for 
inflation.
    The Department valued water using data from the Maharashtra 
Industrial Development Corporation (www.midcindia.org) because it 
includes a wide range of industrial water tariffs. This source provides 
386 industrial water rates within the Maharashtra province from June 
2003: 193 for the ``inside industrial areas'' usage category and 193 
for the ``outside industrial areas'' usage category. Because the value 
was not contemporaneous with the POI, we adjusted the rate for 
inflation.
    To value factory overhead, selling, general, and administrative 
expenses, and profit, we used audited financial statements of Eveready 
Industries India Limited (``Eveready India''), producers of the subject 
merchandise from India, for fiscal year 2006 - 2007.\41\ For purposes 
of initiation, we used the audited financial statements of Manganese 
Ore (India) Ltd. (``MOIL''), a producer of the merchandise under 
consideration that has a fully integrated mining operation. We stated 
at the initiation of this investigation that we would not use the 
financial statements of Eveready India because its financial statements 
reflect a zero profit and it is the Department's practice to disregard 
financial statements that do not demonstrate a profit, where other 
surrogate financial data exist on the record.\42\ In the instant 
investigation, however, we find that because the respondent is a 
producer of EMD, and does not maintain a mining facility, it is 
inappropriate to use the financial statements of MOIL to calculate the 
surrogate financial ratios. Analysis of MOIL's financial statements 
indicates that, due to its integrated mining operations, MOIL's overall 
production is very capital intensive, requiring extensive overhead not 
experienced by enterprises that do not maintain their own mining 
facility, such as Redstar. Notwithstanding Redstar's claim to have an 
integrated mining operation, our analysis of Redstar's questionnaire 
responses, including its financial statements, indicates that Redstar's

[[Page 15994]]

operations do not involve the equipment or facilities required for 
mining and consequently do not reflect the costs associated with a 
mining operation, such as those incurred by MOIL. Therefore, because 
the production experience of MOIL is so different from Redstar's, we 
have determined, in accordance with past practice,\43\ that it is not 
appropriate to utilize the MOIL financial statements for this 
preliminary determination. However, the only financial statements 
currently on the record of this proceeding are those of MOIL and 
Eveready India. Therefore, despite the fact that it is the Department's 
practice not to use a financial statement without a realized profit, 
for this preliminary determination we have determined to use the 
financial statements of Eveready India to calculate surrogate financial 
ratios, as they represent the best available record information for 
this preliminary determination. We encourage interested parties to 
submit alternate publicly available financial statements on the record 
in this proceeding for use in the final determination. Moreover, the 
Department will also attempt to identify additional publicly available 
data for use in determining the surrogate financial ratios for purposes 
of the final determination of this investigation.
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    \41\ See Surrogate Value Memorandum.
    \42\ See Folding Metal Tables and Chairs from the People's 
Republic of China: Final Results of Antidumping Duty Administrative 
Review, 72 FR 71355 (December 17, 2007), and accompanying Issues and 
Decision Memorandum at Comment 1; see also Certain Frozen Warmwater 
Shrimp From the Socialist Republic of Vietnam: Final Results of the 
First Antidumping Administrative Review and First New Shipper 
Review, 72 FR 52052 (Sept. 12, 2007), and accompanying Issues and 
Decision Memorandum at Comment 2), and Notice of Initiation.
    \43\ See Fresh Garlic From the People's Republic of China: Final 
Results of Antidumping Duty Administrative Review, 70 FR 34082 (June 
13, 2005), and accompanying Issues and Decision Memorandum at 
Comment 5.
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Post-Preliminary Determination Supplemental Questionnaire

    In reviewing Redstar's original and supplemental questionnaire 
responses, we have determined that certain reported items require 
additional supplemental information. We will issue a post-preliminary 
determination supplemental questionnaire to Redstar to address these 
and other deficiencies. For example, Redstar has not provided complete 
sales and cost reconciliations. Should Redstar not provide complete and 
adequate sales and cost reconciliations, the Department may not be able 
to conduct verification for this respondent and may have to resort to 
the use of AFA.

Currency Conversion

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

Verification

    As provided in section 782(i)(1) of the Act, we intend to verify 
the information from Redstar upon which we will rely in making our 
final determination.

Combination Rates

    In the Notice of Initiation, the Department stated that it would 
calculate combination rates for certain respondents that are eligible 
for a separate rate in this investigation.\44\ This practice is 
described in Policy Bulletin 05.1.\45\
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    \44\ See Notice of Initiation, 72 FR at 52852.
    \45\ See footnote 19, supra.
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Preliminary Determination

    The weighted-average dumping margins are as follows:

------------------------------------------------------------------------
              Exporter                        Producer           Margin
------------------------------------------------------------------------
Guizhou Redstar Developing Import     Guizhou Redstar          236.81[pe
 and Export Company, Ltd.              Developing Dalong           rcnt]
                                       Manganese Industrial
                                       Co., Ltd.
PRC-Wide Entity[ast]................  .......................  236.81[pe
                                                                   rcnt]
------------------------------------------------------------------------
[ast]The PRC-wide entity includes Xiangtan.

Disclosure

    We will disclose the calculations performed to parties in this 
proceeding within five days of the date of publication of this notice 
in accordance with 19 CFR 351.224(b).

Suspension of Liquidation

    In accordance with section 733(d) of the Act, we will instruct U.S. 
Customs and Border Protection (``CBP'') to suspend liquidation of all 
entries of subject merchandise, entered, or withdrawn from warehouse, 
for consumption on or after the date of publication of this notice in 
the Federal Register. We will instruct CBP to require a cash deposit or 
the posting of a bond equal to the weighted-average amount by which the 
NV exceeds U.S. price, as indicated above. The suspension of 
liquidation will remain in effect until further notice.

International Trade Commission Notification

    In accordance with section 733(f) of the Act, we have notified the 
ITC of our preliminary affirmative determination of sales at LTFV. 
Section 735(b)(2) of the Act requires the ITC to make its final 
determination as to whether the domestic industry in the United States 
is materially injured, or threatened with material injury, by reason of 
imports of EMD, or sales (or the likelihood of sales) for importation, 
of the subject merchandise within 45 days of our final determination.

Public Comment

    Case briefs or other written comments may be submitted to the 
Assistant Secretary for Import Administration no later than seven days 
after the date on which the final verification report is issued in this 
proceeding and rebuttal briefs, limited to issues raised in case 
briefs, may be submitted no later than five days after the deadline 
date for case briefs. See 19 CFR 351.309. A table of contents, list of 
authorities used, and an executive summary of issues should accompany 
any briefs submitted to the Department. This summary should be limited 
to five pages total, including footnotes.
    In accordance with section 774 of the Act, we will hold a public 
hearing, if requested, to afford interested parties an opportunity to 
comment on arguments raised in case or rebuttal briefs. Interested 
parties who wish to request a hearing, or to participate if one is 
requested, must submit a written request to the Assistant Secretary for 
Import Administration, U.S. Department of Commerce, Room 1870, within 
30 days after the date of publication of this notice.\46\ Requests 
should contain the party's name, address, and telephone number, the 
number of participants, and a list of the issues to be discussed. If a 
request for a hearing is made, we intend to hold the hearing three days 
after the deadline for submission of rebuttal briefs at the U.S. 
Department of Commerce, 14\th\ Street and Constitution Ave, NW, 
Washington, DC 20230, at a time and location to be determined. See 19 
CFR 351.310. Parties should confirm by telephone the date, time, and 
location of the hearing two days before the scheduled date.
---------------------------------------------------------------------------

    \46\ See 19 CFR 351.310(c).
---------------------------------------------------------------------------

    We will make our final determination no later than 135 days after 
the date of publication of this preliminary determination, pursuant to 
section 735(a)(2) of the Act. At the hearing each party may make an 
affirmative presentation only on issues raised in that party's case 
brief and may make rebuttal presentations only on arguments included in 
that party's rebuttal brief.

Postponement of Final Determination and Extension of Provisional 
Measures

    Section 735(a)(2)(A) of the Act provides that a final determination 
may be postponed until not later than 135 days after the date of the 
publication of

[[Page 15995]]

the preliminary determination if, in the event of an affirmative 
preliminary determination, a request for such postponement is made by 
exporters who account for a significant proportion of exports of the 
subject merchandise. Section 351.210(e)(2) of the Department's 
regulations requires that exporters requesting postponement of the 
final determination must also request an extension of the provisional 
measures referred to in section 733(d) of the Act from a four-month 
period until not more than six months. We received a request to 
postpone the final determination from Redstar on March 11, 2008. In 
addition, Redstar requested the extension of provisional measures from 
a four-month period to not longer than six months. Because this 
preliminary determination is affirmative, the request for postponement 
was made by the exporter accounting for a significant proportion of 
exports of the subject merchandise, and there is no compelling reason 
to deny the respondent's request, we have extended the deadline for 
issuance of the final determination until the 135\th\ day after the 
date of publication of this preliminary determination in the Federal 
Register and have extended provisional measures to not longer than six 
months.
    This determination is issued and published in accordance with 
sections 733(f) and 777(i)(1) of the Act.

    Dated: March 19, 2008.
David M. Spooner,
Assistant Secretary for Import Administration.
[FR Doc. E8-6165 Filed 3-25-08; 8:45 am]
BILLING CODE 3510-DS-S