[Federal Register Volume 75, Number 117 (Friday, June 18, 2010)]
[Notices]
[Pages 34689-34699]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-14391]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-832]


Pure Magnesium From the People's Republic of China: Preliminary 
Results of the 2008-2009 Antidumping Duty Administrative Review

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

SUMMARY: In response to requests from interested parties, the 
Department of Commerce (``the Department'') is conducting an 
administrative review of the antidumping duty order on pure magnesium 
from the People's Republic of China (``PRC''), covering the period May 
1, 2008, through April 30, 2009.
    We have preliminarily determined that the respondent in this 
administrative review has made sales in the United States at prices 
below normal value during the period of review (``POR''). We have also 
preliminarily determined that two companies for which a review was 
requested have not been responsive and, thus, have not demonstrated 
entitlement to a separate rate. As a result, we have preliminarily 
determined that they are part of the PRC-Wide Entity and have assigned 
them the PRC-Wide Entity rate. If these preliminary results are adopted 
in the final results of review, we will instruct U.S. Customs and 
Border Protection (``CBP'') to assess antidumping duties on all 
appropriate entries.
    We invite interested parties to comment on these preliminary 
results. Parties who submit comments are requested to submit with each 
argument a summary of the argument. We intend to issue the final 
results no later than

[[Page 34690]]

120 days from the date of publication of this notice, pursuant to 
section 751(a)(3)(A) of the Tariff Act of 1930, as amended (``the 
Act'').

DATES: Effective Date: June 18, 2010.

FOR FURTHER INFORMATION CONTACT: Laurel LaCivita or Eugene Degnan, AD/
CVD Operations, Office 8, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-
4243 and (202) 482-0414, respectively.

Background

    On May 12, 1995, the Department published in the Federal Register 
the antidumping duty order on pure magnesium from the PRC.\1\ On May 1, 
2009, the Department published in the Federal Register a notice of 
opportunity to request an administrative review of the antidumping duty 
order on pure magnesium from the PRC for the period May 1, 2008, 
through April 30, 2009.\2\ On May 28, 2009, in accordance with 19 CFR 
351.213(b)(2), Tianjin Magnesium International, Co. Ltd. (``TMI''), a 
foreign exporter of the subject merchandise, requested the Department 
to review its sales of subject merchandise. On May 29, 2009, US 
Magnesium LLC (``Petitioner'') requested that the Department conduct an 
administrative review of the exports of subject merchandise of TMI, 
Tianjin Xianghaiqi Resources Import & Export Trade Co., Ltd. (``TXR''), 
and Pan Asia Magnesium Co., Ltd. (``Pan Asia''). On the same date, 
Alcoa Inc. and Alumax Mill Products (collectively, ``Alcoa''), a 
domestic interested party, requested a review of TXR. On June 24, 2009, 
the Department initiated an administrative review of the order on pure 
magnesium from the PRC for the POR with respect to TMI, TXR and Pan 
Asia.\3\
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    \1\ See Notice of Antidumping Duty Orders: Pure Magnesium From 
the People's Republic of China, the Russian Federation and Ukraine; 
Notice of Amended Final Determination of Sales at Less Than Fair 
Value: Antidumping Duty Investigation of Pure Magnesium From the 
Russian Federation, 60 FR 25691 (May 12, 1995).
    \2\ See Antidumping or Countervailing Duty Order, Finding, or 
Suspended Investigation; Opportunity To Request Administrative 
Review, 74 FR 20278 (May 1, 2009).
    \3\See Initiation of Antidumping and Countervailing Duty 
Administrative Reviews and Requests for Revocation in Part. 74 FR 
30052 (June 24, 2009).
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    On August 3, 2009, Trade Bridge, counsel for TXR and Pan Asia, 
withdrew its representation for these companies. On August 4, 2009, the 
Department issued its antidumping duty questionnaire to TMI, TXR, and 
Pan Asia by FedEx. TXR received and signed for the hard copy of the 
Department's questionnaire on August 7, 2009, and Pan Asia received and 
signed for the hard copy of the Department's questionnaire on August 8, 
2009.\4\ However, neither TXR, nor Pan Asia responded to the 
Department's antidumping duty questionnaire. On September 1, 2009, TMI 
timely submitted its Section A questionnaire response (``TMI's AQR''). 
On September 15, 2009, TMI submitted its Section C questionnaire 
response (``TMI's CQR'') and on September 29, 2009, TMI submitted its D 
questionnaire response (``TMI's DQR''). On November 10, 2009, 
Petitioner submitted comments on TMI's AQR, CQR, and DQR. On December 
23, 2009, the Department issued its first supplemental questionnaire to 
TMI. On January 12, 2010, Petitioner requested that the Department 
conduct verification of TMI in accordance with 19 CFR 
351.307(b)(1)(iv). On February 9, 2010, TMI submitted its response to 
the Department's sections A, C, and D supplemental questionnaire 
(``TMI's 1st SQR''). On March 31, 2010, the Department issued the 
second supplemental questionnaire to TMI and the Department received a 
response on April 12, 2010.
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    \4\ See Memorandum to the file, ``Pure Magnesium from the 
People's Republic of China, Tianjin Xianghaiqi Resources Import and 
Export Trade Co., Ltd. (``TXR'') and Pan Asia Magnesium Co., Ltd. 
(``Pan Asia''): Transmittal of FEDEX Receipt Documentation,'' dated 
May 11, 2010.
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    On September 15, 2009, the Department requested that import 
Administration's Office of Policy provide a list of surrogate countries 
for this review.\5\ On October 13, 2009, the Office of Policy issued 
its list of surrogate countries.\6\ On October 16, 2009, the Department 
issued a letter to interested parties seeking comments on surrogate 
country selection and surrogate values (``SV5''). On October 30, 2009, 
Petitioner and TMI submitted comments on surrogate country selection 
(``Petitioner's Surrogate Country Selection Letter'' and ``TMI's 
Surrogate Country Selection Letter,'' respectively). On November 12, 
2009, Petitioner and TMI submitted SV comments (``Petitioner's SV 
Comments'' and ``TMI's SV Comments,'' respectively). On November 25, 
2009, Petitioner submitted rebuttal SV comments. On November 27, 2009, 
TMI submitted rebuttal SV comments. On December 7, 2009, TMI submitted 
additional SV comments.
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    \5\ See Memorandum to Kelly Parkhill, Acting Director, Office of 
Policy, ``Antidumping Duty Administrative Review of Pure Magnesium 
from the People's Republic of China: Surrogate-Country Selection,'' 
dated September 15, 2009.
    \6\ See Memorandum from Kelly Parkhill, Acting Director, Office 
of Policy, ``Request for a list of Surrogate Countries for an 
Administrative Review of the Antidumping Duty Order on Pure 
Magnesium (``Pure Magnesium'') from the People's Republic of China, 
dated October 13, 2009 (``Surrogate Country List'').
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    On January 6, 2010, the Department extended the time period for 
completion of the preliminary results of this review by 120 days until 
May 31, 2010.\7\
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    \7\ See Pure Magnesium from the Peoples Republic of China: 
Extension of Time for the Preliminary Results of the Antidumping 
Duty Administrative Review 75 FR 2108 (January 14, 2010).
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    On February 18, 2010, the Department requested that CBP provide 
entry documentation for certain of TMI's transactions during the 
POR.\8\
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    \8\ See Memorandum to Alice Buchanan, Acting Director, AD/CVD/
Revenue Policy & Programs, Office of International Trade, U.S. 
Customs and Border Protection, ``Request for U.S. Entry Documents--
Pure Magnesium from People's Republic of China--A-570-832,'' dated 
February 18, 2010.
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    As explained in the memorandum from the Deputy Assistant Secretary 
for Import Administration, the Department has exercised its discretion 
to toll deadlines for the duration of the closure of the Federal 
Government from February 5, through February 12, 2010. Thus, all 
deadlines in this segment of the proceeding have been extended by seven 
days. As a result, the revised deadline for the preliminary results of 
this administrative review became June 7, 2010.\9\
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    \9\ See Memorandum to the Record from Ronald Lorentzen, DAS for 
Import Administration, regarding ``Tolling of Administrative 
Deadlines As a Result of the Government Closure During the Recent 
Snowstorm,'' dated February 12, 2010.
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Verification

    As provided in section 782(i)(3) of the Act, we verified the 
information from TMI upon which we have relied in making our 
preliminary results of review from April 19, 2010 to May 6, 2010. The 
Department's verification report is on the record of this review in the 
Central Records Unit, Room 1117 of the main Department building.\10\ We 
used standard verification procedures, including examination of 
relevant accounting and production records, as well as original source 
documents provided by the respondent.
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    \10\ See Memorandum to the File ``Antidumping Duty 
Administrative Review of Pure Magnesium From the People's Republic 
of China: Verification of the Sales and Factors of Production 
(``FOP'') of Tianjin Magnesium Industries (``TMI''),'' dated June 7, 
2010.
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Period of Review

    The POR is May 1, 2008, through April 30, 2009.

[[Page 34691]]

Scope of Order

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

Non-Market Economy Country Status

    The Department has treated the PRC as a non-market economy 
(``NME'') country in all past antidumping duty investigations and 
administrative reviews and continues to do so in this case.\11\ The 
Department has previously examined the PRC's market economy status and 
determined that NME status should continue for the PRC.\12\ In 
accordance with section 771(18)(C)(i) of the Act, any determination 
that a foreign country is an NME country shall remain in effect until 
revoked by the administering authority.\13\ No interested party to this 
proceeding has contested such treatment. Accordingly, we calculated 
normal value (``NV'') using a factors of production (``FOP'') 
methodology in accordance with section 773(c) of the Act, which applies 
to NME countries.
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    \11\ See 771(18)(C) of the Act; see, e.g., Pure Magnesium from 
the People's Republic of China: Final Results of Antidumping Duty 
Administrative Review, 73 FR 76336 (December 16, 2008) (``Pure 
Magnesium 06-07''); and Frontseating Service Valves From the 
People's Republic of China: Final Determination of Sales at Less 
Than Fair Value and Final Negative Determination of Critical 
Circumstances, 74 FR 10886 (March 13, 2009).
    \12\ See Memorandum from the Office of Policy to David M. 
Spooner, Assistant Secretary for Import Administration, The People's 
Republic of China (PRC) Status as a Non-Market Economy (NME), dated 
May 15, 2006. This document is available online at http://ia.ita.doc.gov/download/prc-nme-status/prc-nme-status-memo.pdf.
    \13\ See section 771(18)(C)(i) of the Act.
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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 NV on the NME 
producer's FOPs. The Act further instructs that valuation of the FOPs 
shall be based on the best available information in a surrogate market-
economy country or countries considered to be appropriate by the 
Department.\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 SVs are 
discussed under the ``Normal Value'' section below and in the Factor 
Valuation Memorandum, which is on file in the Central Records Unit, 
Room 1117 of the main Department building.\17\
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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).
    \17\ See Memorandum to the File, ``2008-2009 Administrative 
Review of the Antidumping Duty Order on Pure Magnesium from the 
People's Republic of China: Factor Valuation Memorandum for the 
Preliminary Results,'' dated June 7, 2010 (``Factor Valuation 
Memorandum'').
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    In examining which country to select as its primary surrogate 
country for this proceeding, the Department first determined that 
India, the Philippines, Indonesia, Colombia, Thailand, and Peru are 
countries comparable to the PRC in terms of economic development.\18\ 
In Petitioner's Surrogate Country Selection Letter, Petitioner contends 
that the Department should continue to select India as the surrogate 
country for this administrative review, as it has in previous segments 
of this proceeding. In addition, Petitioner maintains that to the best 
of its knowledge, there are no magnesium producers currently operating 
in any of the six countries identified in the Surrogate Country 
Memorandum.\19\ Petitioner states that Southern Magnesium & Chemicals 
Ltd. (``Southern Magnesium''), which is located in India, has either 
downsized or ceased its magnesium production operations.\20\ Petitioner 
argues, however, that India is a significant producer of aluminum and 
the Department has ``routinely determined that aluminum is a product 
comparable to magnesium production.'' \21\ Petitioner states that India 
has five major producers of aluminum.\22\ Additionally, Petitioner 
contends that the Department determined that zinc is the only other 
merchandise that the Department has found to be comparable to 
magnesium,\23\ and India is a significant producer of zinc.\24\ 
Finally, Petitioner

[[Page 34692]]

contends that India is the best available surrogate country for this 
proceeding because India is known to have complete, up-to-date, and 
reliable publicly available information for all raw material FOPs.\25\ 
Petitioner states that India is the only potential surrogate country 
that can be a source for surrogate financial ratios because India is a 
significant producer of aluminum and zinc.\26\
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    \18\ See Surrogate Country List.
    \19\ See Petitioner's Surrogate Country Selection Letter, at 3.
    \20\ See 2002 Annual Report of Southern Magnesium, contained in 
Petitioner's Surrogate Country Selection Letter, at 3 and Exhibit 2.
    \21\ See Petitioner's Surrogate Country Selection Letter, at 4, 
citing Pure Magnesium 06-07 and accompanying Issues and Decision 
Memorandum at Comment 6.D.
    \22\ See Petitioner's Surrogate Country Selection Letter, at 4, 
citing The Mineral Industry of India--2007, at Table 2, U.S. 
Geological Survey (``USGS''), contained in Exhibit 3; also citing 
USGS Minerals Yearbook Zinc--2006 at Table 16, contained in Exhibit 
4.
    \23\ See Petitioner's Surrogate Country Selection Letter, at 5, 
citing Notice of Final Determination of Sales at Not Less Than Fair 
Value: Pure Magnesium From the Russian Federation, 66 FR 49347 
(September 27, 2001), at Comment 1.
    \24\ See Petitioner's Surrogate Country Selection Letter, at 5, 
citing USGS Minerals Yearbook, Zinc--2007, at Table 2, contained in 
Exhibit 3. See also USGS 2007 Minerals Yearbook, Zinc (Advance 
Release), at Table 13, contained in Exhibit 4.
    \25\ See Petitioner's Surrogate Country Selection Letter, at 5-
6.
    \26\ Id.
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    In TMI's Surrogate Country Selection Letter, TMI contends that 
India is the most appropriate surrogate country for the PRC in this 
review.\27\ TMI reiterates the reasons that the Department articulated 
in its determination to use India as the appropriate surrogate country 
in the 2006-2007 administrative review of pure magnesium from the PRC: 
(1) India is a significant producer of comparable merchandise; (2) 
India is at a level of economic development comparable to the PRC; and 
(3) the Department has reliable data to use from India.\28\ Both 
Petitioner and TMI submitted Indian sourced data to value FOPs.
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    \27\ See TMI's Surrogate Country Selection Letter at 1.
    \28\ See id. at 3, citing, Pure Magnesium from the People's 
Republic of China: Preliminary Results of 2007-2008 Antidumping Duty 
Administrative Review, 74 FR 27090 (June 8, 2009); Pure Magnesium 
06-07; and Pure Magnesium from the People's Republic of China: Final 
Results of 2004-2005 Antidumping Duty Administrative Review, 71 FR 
61019 (October 17, 2006).
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    After evaluating interested parties' comments, the Department has 
determined that India is the appropriate surrogate country to use in 
this review in accordance with section 773(c)(4) of the Act. The 
Department based its decision on the following facts: (1) India is at a 
level of economic development comparable to that of the PRC; (2) India 
is a significant producer of comparable merchandise, i.e., aluminum and 
zinc; and (3) India provides the best opportunity to use quality, 
publicly available data to value the FOPs. All the data submitted by 
both Petitioner and TMI for our consideration as potential SVs and 
surrogate financial ratios are sourced from India. Finally, on the 
record of this review, we have usable SV data (including financial 
data) from India, but no such surrogate data from other potential 
surrogate country.
    Therefore, because India best represents the experience of 
producers of comparable merchandise operating in a surrogate country, 
we have selected India as the surrogate country and, accordingly, have 
calculated NV using Indian prices to value TMI's FOPs, when available 
and appropriate. We have obtained and relied upon publicly available 
information wherever possible.
    In accordance with 19 CFR 351.301 (c)(3)(ii), interested parties 
may submit publicly available information to value the FOPs within 20 
days after the date of publication of the preliminary results of 
review.\29\
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    \29\ In accordance with 19 CFR 351.301(c)(1), for the final 
determination of this review, interested parties may submit factual 
information to rebut, clarify, or correct factual information 
submitted by an interested party less than ten days before, on, or 
after the applicable deadline for submission of such factual 
information. However, the Department notes that 19 CFR 351.301 
(c)(1) permits new information only insofar as it rebuts, clarifies, 
or corrects information recently placed on the record. The 
Department generally cannot accept the submission of additional, 
previously absent-from-the-record alternative SV information 
pursuant to 19 CFR 351.301(c)(1). See Glycine from the People's 
Republic of China: Final Results of Antidumping Duly Administrative 
Review and Final Rescission, in Part, 72 FR 58809 (October 17, 
2007), and accompanying Issues and Decision Memorandum at Comment 2.
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Separate Rates

    In proceedings involving NME countries, the Department has a 
rebuttable presumption that all companies within the country are 
subject to government control and thus should be assessed a single 
antidumping duty rate. It is the Department's policy to assign all 
exporters of subject merchandise in an NME country this single rate 
unless an exporter can demonstrate that it is sufficiently independent 
so as to be entitled to a separate rate. Exporters can demonstrate this 
independence through the absence of both dejure and defacto 
governmental 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 Notice of Final Determination 
of Sales at Less Than Fair Value. Silicon Carbide From the People's 
Republic of China, 59 FR 22585 (May 2, 1994) (``Silicon Carbide''). 
However, if the Department determines that a company is wholly foreign-
owned or located in a market economy, then a separate rate analysis is 
not necessary to determine whether it is independent from government 
control.

Separate Rate Recipients

    TMI is the only responsive respondent in this administrative 
review. TMI reported that it is a wholly Chinese-owned company. 
Therefore, the Department must analyze whether it can demonstrate the 
absence of both dejure and defacto government control over export 
activities. Because neither TXR nor Pan Asia responded to the 
Department's questionnaire, these companies did not provide separate 
rate information to demonstrate their eligibility for separate-rate 
status. As a result, the Department is treating these companies as part 
of the PRC-Wide Entity.

a. Absence of De Jure Control

    The Department considers the following dejure 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.\30\
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    \30\ Sparklers, 56 FR at 20589.
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    The evidence provided by TMI supports a preliminary finding of 
dejure absence of government control based on the following: (1) An 
absence of restrictive stipulations associated with its business and 
export licenses; (2) applicable legislative enactments decentralizing 
control of companies; and (3) formal measures by the government 
decentralizing control of companies.\31\
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    \31\ See Foreign Trade Law of the People's Republic of China, 
contained in TMI's AQR, at Exhibit A-2; see also Regulations of the 
People's Republic of China on Company Registration contained in 
TMI's AQR at Exhibit A-5.
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b. Absence of De Facto Control

    Typically, the Department considers four factors in evaluating 
whether each respondent is subject to defacto 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.\32\ The Department has determined that an analysis 
of de facto control is critical in determining whether respondents are, 
in fact, subject to a degree of governmental control,

[[Page 34693]]

which would preclude the Department from assigning separate rates.
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    \32\ See Silicon Carbide, 59 FR at 22587; see also Notice of 
Final Determination of Sales at Less Than Fair Value: Furfuryl 
Alcohol From the People's Republic of China, 60 FR 22544, 22545 (May 
8, 1995).
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    The evidence provided by TMI supports a preliminary finding of 
defacto absence of government control based on the following: (1) The 
absence of evidence that the export prices are set by or are subject to 
the approval of a government agency; \33\ (2) the respondent has 
authority to negotiate and sign contracts and other agreements; \34\ 
(3) the respondent has autonomy from the government in making decisions 
regarding the selection of management; \35\ and (4) the respondent 
retains the proceeds of its export sales and makes independent 
decisions regarding disposition of profits or financing of losses.\36\
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    \33\ See TMI's AQR, at 7; see also the contract and the purchase 
order between TMI and a U.S. Customer contained in TMI's AQR at 
Exhibit A-6. See also TMI's 1st SQR at 19-22 and Exhibit SA-7a and 
SA-7b.
    \34\ See TMI's AQR, at 7-8.
    \35\ See TMI's AQR at 8.
    \36\ See TMI's AQR at 9-10.
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    Therefore, the evidence placed on the record of this review by TMI 
demonstrates an absence of dejure and defacto government control with 
respect to TMI's exports of the merchandise under review, in accordance 
with the criteria identified in Sparklers and Silicon Carbide. 
Accordingly, we have determined that TMI has demonstrated its 
eligibility for a separate rate.

Fair Value Comparisons

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

Export Price

    In accordance with section 772(a) of the Act, EP is the price at 
which the subject merchandise is first sold (or agreed to be sold) 
before the date of importation by the producer or exporter of the 
subject merchandise outside of the United States to an unaffiliated 
purchaser in the United States or to an unaffiliated purchaser for 
exportation to the United States, as adjusted under section 772(c) of 
the Act. In accordance with section 772(a) of the Act, we have used EP 
for TMI's U.S. sales because the subject merchandise was sold directly 
to the unaffiliated customers in the United States prior to importation 
and because Constructed Export Price was not otherwise warranted.
    We have based the EP on delivered prices to unaffiliated purchasers 
in the United States. In accordance with section 772(c)(2)(A) of the 
Act, we have made deductions from the starting price for movement 
expenses, including expenses for foreign inland freight from the plant 
to the port of exportation, domestic brokerage and handling, 
international freight, marine insurance, brokerage and handling 
expenses incurred in the U.S., U.S. customs duty, freight from the U.S. 
port to the customer, rebanding, inventory and warehouse handling 
expenses. TMI neither reported nor claimed other adjustments to EP.\37\
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    \37\ See Memorandum to the File ``Analysis Memorandum for the 
Preliminary Results of the 2008-2009 Administrative Review of Pure 
Magnesium from the People's Republic of China: Tianjin Magnesium 
International Co., Ltd. (``TMI'')'' (``TMI's Analysis Memorandum''), 
dated June 7, 2010.
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Normal Value

    Section 773(c)(1) of the Act provides that, the Department shall 
determine NV using an FOP methodology if the merchandise is exported 
from an NME country and the Department finds that the available 
information does not permit the calculation of NV using home-market 
prices, third-country prices, or constructed value under section 773(a) 
of the Act. When determining NV in an NME context, the Department will 
base NV on FOPs because the presence of government controls on various 
aspects of these economies renders price comparisons and the 
calculation of production costs invalid under our normal methodologies. 
The Department's questionnaire requires that TMI provide information 
regarding the weighted-average FOPs across all of the company's plants 
that produce the subject merchandise, not just the FOPs from a single 
plant. This methodology ensures that the Department's calculations are 
as accurate as possible.\38\
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    \38\ See e.g., Final Determination of Sales at Less Than Fair 
Value and Critical Circumstances: Certain Malleable Iron Pipe 
Fittings From the People's Republic of China, 68 FR 61395 (October 
28, 2003), and accompanying Issue and Decision Memorandum at Comment 
19.
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    In accordance with 19 CFR 351.408(c)(1), the Department will 
normally use publicly available information to find an appropriate SV 
to value FOPs, but when a producer sources an input from a market 
economy and pays for it in market-economy currency, the Department may 
value the factor using the actual price paid for the input.\39\ TMI 
reported that it did not purchase inputs from market-economy suppliers 
for the production of the subject merchandise.\40\
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    \39\ See 19 CFR 351.408(c)(1); see also Shakeproof Assembly 
Components, Div. of Ill. Tool Works, Inc. v. United States, 268 F.3d 
1376, 1382-1383 (Fed. Cir. 2001) (affirming the Department's use of 
market-based prices to value certain FOPs).
    \40\ See TMJ's DQR at D-5.
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    We calculated NV based on FOPs in accordance with section 773(c)(3) 
and (4) of the Act and 19 CFR 351.408(c). The FOPs include but are not 
limited to: (1) Hours of labor required; (2) quantities of raw 
materials employed; (3) amounts of energy and other utilities consumed; 
and (4) representative capital costs. The Department used FOPs reported 
by TMI for materials, energy, labor, by-products, and packing.
    TMI stated that it generates three by-products during the 
production process: magnesium waste, cement clinker and coal tar.\41\ 
TMI requested a by-product offset for all three products. However, TMI 
failed to establish that the magnesium waste and cement clinker 
generated during the course of production has commercial value.\42\ 
Therefore, for these preliminary results, we have granted TMI a by-
product offset solely for coal tar.\43\
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    \41\ Id. at D-13-15 and Exhibits D-8 through D-10.
    \42\ See TMI's Verification Report, section XVI, ``By-
Products.''
    \43\ See TMI s Analysis Memorandum at 4.
---------------------------------------------------------------------------

Factor Valuations

    In accordance with section 773(c) of the Act, the Department 
calculated NV based on FOPs reported by TMI for the POR. To calculate 
NV, the Department multiplied the reported per-unit factor consumption 
quantities by publicly available Indian SVs. In selecting the SVs, the 
Department considered the quality, specificity, and contemporaneity of 
the data. The Department adjusted input prices by including freight 
costs to make them delivered prices, as appropriate. Specifically, the 
Department added to Indian import SVs a surrogate freight cost using 
the shorter of the reported distance from the domestic supplier to the 
factory or the distance from the nearest seaport to the factory of 
production. This adjustment is in accordance with the decision of the 
U.S. Court of Appeals for the Federal Circuit in Sigma Corp. v. United 
States, 117 F.3d 1401, 1407-08 (Fed. Cir. 1997). A detailed description 
of all SVs used to value TMI's reported FOPs may be found in the Factor 
Valuation Memorandum.
    The Department calculated SVs for the majority of reported FOPs 
purchased from NME sources using the contemporaneous, weighted-average 
unit import value derived from the Monthly Statistics of the Foreign 
Trade of India, as published by the Directorate General of Commercial 
Intelligence and

[[Page 34694]]

Statistics of the Ministry of Commerce and Industry, Government of 
India in the World Trade Atlas (``WTA''), available at http://www.gtis.comlwta.htm (``WTA Indian Import Statistics'').\44\ WTA Indian 
Import Statistics were reported in U.S. dollars \45\ and are 
contemporaneous with the POR to calculate SVs for TMI's material 
inputs. In selecting the best available information for valuing FOPs in 
accordance with section 773(c)(1) of the Act, the Department's practice 
is to select, to the extent practicable, SVs which are non-export 
average values, most contemporaneous with the period of review, 
product-specific, and tax-exclusive.\46\
---------------------------------------------------------------------------

    \44\ See Factor Valuation Memorandum.
    \45\ The import data obtained from the WTA as published by 
Global Trade Information Services began identifying the original 
reporting currency for India as the U.S. dollar. See Memorandum to 
the file, ``Indian Import Statistics Currency Denomination in the 
World Trade Atlas,'' dated March 29, 2010.
    \46\ See, e.g., Notice of Preliminary Determination of Sales at 
Less Than Fair Value, Negative Preliminary Determination of Critical 
Circumstances and Postponement of Final Determination: Certain 
Frozen and Canned Warmwater Shrimp From the Socialist Republic of 
Vietnam, 69 FR 42672, 42682 (July 16, 2004), unchanged in Final 
Determination of Sales at Less Than Fair Value: Certain Frozen and 
Canned Warmwater Shrimp From the Socialist Republic of Vietnam, 69 
FR 71005 (December 8, 2004).
---------------------------------------------------------------------------

    In those instances where the Department could not obtain publicly 
available information contemporaneous with the POR with which to value 
FOPs, the Department adjusted the publicly available SVs using the 
Indian Wholesale Price Index, as published in the International 
Financial Statistics of the International Monetary Fund.\47\
---------------------------------------------------------------------------

    \47\ See Factor Valuation Memorandum.
---------------------------------------------------------------------------

    Furthermore, with regard to Indian import-based SVs, we have 
disregarded prices that we have reason to believe or suspect may be 
subsidized, such as those from Indonesia, South Korea, and Thailand. We 
have found in other proceedings that these countries maintain broadly 
available, non-industry-specific export subsidies and, therefore, it is 
reasonable to infer that all exports to all markets from these 
countries may be subsidized.\48\ We are also guided by the statute's 
legislative history that explains that it is not necessary to conduct a 
formal investigation to ensure that such prices are not subsidized.\49\ 
Rather, the Department was instructed by Congress to base its decision 
on information that is available to it at the time it is making its 
determination. In accordance with the foregoing, we have not used 
prices from these countries in calculating the Indian import-based SVs.
---------------------------------------------------------------------------

    \48\ See Final Results Of Redetermination Pursuant To Court 
Remand, dated February 25, 2010, Jinan Yipin Corp., Ltd. v. United 
States, 637 F. Supp. 2d 1183 (CIT 2009). See also Certain Frozen 
Fish Fillets from the Socialist Republic of Vietnam: Preliminary 
Results and Preliminary Partial Rescission of Antidumping Duty 
Administrative Review, 70 FR 54007, 54011 (September 13, 2005), 
unchanged in Certain Frozen Fish Fillets From the Socialist Republic 
of Vietnam: Final Results of the First Administrative Review, 71 FR 
14170 (March 21, 2006); and China Nat'l Mach. Import & Export Corp. 
v. United States, 293 F. Supp. 2d 1334 (CIT 2003), affirmed 104 Fed. 
Appx. 183 (Fed. Cir. 2004).
    \49\ See H.R. Rep. No. 100-576 at 590 (1988).
---------------------------------------------------------------------------

    The Department used WTA Indian Import Statistics to calculate SVs 
for raw materials, packing materials and by-products including 
ferrosilicon, fluorite powder, sulphur powder, sulfuric acid, magnesium 
metal waste, magnesium waste, coal tar, plastic bags, steel bands and 
plastic bands.
    For dolomite, we continue to find, as we did in the previous 
segments of this proceeding, that it is reasonable to conclude that WTA 
data represent prices of imported dolomite in the high-end, value-added 
product range while the dolomite used to produce subject merchandise is 
the high-bulk, low-value commodity.\50\ Therefore, as in the 2006-07 
administrative review, we have preliminarily determined to use the 
audited financial statements of Indian producers submitted on the 
record of this review as the basis of the SV for dolomite.\51\ TMI 
placed the audited financial statements of four companies on the record 
covering the period April 1, 2008 through March 31, 2009: Madras 
Cements Ltd. (``Madras Cements''), Tata Sponge Iron Ltd. (``Tata Sponge 
Iron''), The Bisra Stone Lime Company Ltd. (``Bisra''), and Steel 
Authority of India, Limited (``SAIL'').\52\ In examining these 
financial statements, we have determined that the prices reflected in 
the financial statements of Madras Cements and Tata Sponge Iron 
represent the best available information on the record with which to 
value dolomite. Both of these financial statements are fully legible 
and generally contemporaneous with the POR. The companies were both 
profitable and did not receive subsidies that the Department has found 
to be countervailable and would otherwise taint the prices of materials 
that it sold or consumed. However, we have determined not to rely on 
Bisra's financial statements because Bisra was unprofitable. 
Consequently, we cannot determine whether Bisra's dolomite sales prices 
represent market prices or were made below market value. Additionally, 
we have determined not to use SAIL's audited financial statements 
because SAIL received loans from the Steel Development Fund,\53\ which 
the Department has previously determined are countervailable.\54\ 
Because the dolomite prices recorded on SAIL's financial statements 
reflect SAIL's consumption of raw materials produced in captive 
mines,\55\ these prices have been tainted by the subsidies reflected on 
its financial statements.\56\ Therefore, we have determined the SV of 
dolomite based on the simple average of domestic prices for dolomite 
provided in the audited financial statements of Madras Cements and Tata 
Sponge Iron.
---------------------------------------------------------------------------

    \50\ See Pure Magnesium 06-07, and accompanying Issues and 
Decision Memorandum at Comment 1. In addition, see TMI's SV Comments 
at Exhibits SV-2C and SV-2D, which respectively contain, British 
Geological Survey (2006): Dolomite and A Review of the Dolomite and 
Limestone Industry in South Africa Report R43/2003.
    \51\ Id.
    \52\ See TMI's SV Comments at Exhibits SV-2f through SV-2i.
    \53\ See TMI's SV Comments at Exhibit SV-2i, at page 50 and 103.
    \54\ See, e.g., Certain Hot-Rolled Carbon Steel Flat Products 
From India: Final Results of Countervailing Duty Administrative 
Review, 73 FR 40295 (July 14, 2008).
    \55\ See TMI's SV Comments at Exhibit SV-2i, at page 12.
    \56\ See TMI's SV Comments at Exhibit SV-2i, at page 50 and 103.
---------------------------------------------------------------------------

    We valued flux No. 2, which consists of magnesium chloride, 
potassium chloride and sodium chloride, using data from Chemical 
Weekly. We consider both Chemical Weekly and WTA Indian Import 
Statistics to be reliable sources and, as such, the Department has used 
them in past cases to value chemical component inputs. In the instant 
case, however, we have determined that Chemical Weekly is the best 
available information for valuing flux because the quantity of the 
total imports of magnesium chloride in the WTA Indian Import Statistics 
is very small and, thus, does not appear to represent commercial 
quantities.\57\
---------------------------------------------------------------------------

    \57\ See Factor Valuation Memorandum.
---------------------------------------------------------------------------

    TMI requested that the Department offset its NV for three by-
products generated in the course of the production process: Coal tar, 
magnesium waste and cement clinker.\58\ At verification, TMI 
established that its producers sold coal tar in arm's length 
transactions and received payments for those sales.\59\ However, none 
of the parties placed a SV for coal tar on the record of this review. 
Therefore, for the preliminary results, we will value coal tar using 
HTS 2706, Tar Distilled From Coal, Lignite Or Peat and Other 
Minerals,\60\ and will ask parties to

[[Page 34695]]

comment on the record concerning the appropriate SV for coal tar for 
the final results. For magnesium waste and cement clinker, TMI reported 
a three-party arrangement whereby the magnesium producers provide the 
by-product to a freight provider in return for offsets to the money 
owed to that freight provider by the magnesium producer for previous 
services rendered.\61\ However, TMI could not demonstrate actual 
payment received for these by-products and, therefore, failed to 
establish that its by-products for magnesium waste and cement clinker 
have commercial value.\62\ Specifically, TMI was unable to show 
receipts that its freight provider received from the purchaser to 
demonstrate that the by-products of magnesium waste and cement clinker 
have commercial value. Therefore, the Department has preliminarily 
determined not to grant TMI a by-product offset for magnesium waste and 
cement clinker.
---------------------------------------------------------------------------

    \58\ See TMI's DQR at D-13 to D-15.
    \59\ See TMI Verification Report at section XVI, ``By-
Products.''
    \60\ See Factor Valuation Memorandum.
    \61\ See TMI Verification Report at section XVI, ``By-
Products.''
    \62\ See TMI Verification Report at section XVI, ``By-
Products.''
---------------------------------------------------------------------------

    For direct labor, indirect labor, and packing labor, consistent 
with 19 CFR 351.408(c)(3), the Department used the PRC regression-based 
wage rate as reported on Import Administration's Web site.\63\ Because 
this regression-based wage rate does not separate the labor rates into 
different skill levels or types of labor, the Department has applied 
the same wage rate to all skill levels and types of labor reported by 
TMI.
---------------------------------------------------------------------------

    \63\ See ``Expected Wages of Selected NME Countries,'' revised 
in December 2009, available at http://ia.ita.doc.gov/wages/07wages/final/final-2009-2007-wages.html. The source of these wage-rate data 
is the Yearbook of Labour Statistics 2007, ILO (Geneva: 2008), 
Chapter 5B: Wages in Manufacturing. The years of the reported wage 
rates are from 2006 and 2007.
---------------------------------------------------------------------------

    We valued electricity using the updated electricity price data for 
small, medium, and large industries, as published by the Central 
Electricity Authority, an administrative body of the Government of 
India, in its publication titled Electricity Tariff & Duty and Average 
Rates of Electricity Supply in India, dated March 2008.\64\ These 
electricity rates represent actual country-wide, publicly available 
information on tax-exclusive electricity rates charged to small, 
medium, and large industries in India. We did not inflate this value 
because utility rates represent current rates, as indicated by the 
effective dates listed for each of the rates provided.
---------------------------------------------------------------------------

    \64\ See Factor Valuation Memorandum.
---------------------------------------------------------------------------

    To value steam coal, we used steam coal prices from the December 
12, 2007, CIL's Coal Pricing Circular. See CIL: S&M: GM(F): Pricing 
1124, dated 12 December 2007).\65\ Since TMI reports using non-coking 
coal with a useful heat value of 5500 kcal/kg,\66\ we calculated the SV 
for steam coal by averaging the prices of grades B and C steam coal 
from the December 12, 2007, CIL Coal Pricing Circular.\67\ We did not 
inflate this value to the current POR because the steam coal rates 
represent the rates that were in effect until October 16, 2009,\68\ and 
are, therefore, contemporaneous with the POR. Finally, we have applied 
an additional fixed surcharge of 165 rupees (``Rs.'')/metric ton 
(``MT'') to our calculation of the average of B and C grades of steam 
coal.
---------------------------------------------------------------------------

    \65\ See Factor Valuation Memorandum.
    \66\ TMI's DQR at D-12. See also Annexure X of CIL's Coal 
Pricing Circular in the Factor Valuation Memorandum (identifying the 
range of kcal/kg in each grade of coal).
    \67\ See Factor Valuation Memorandum.
    \68\ See http://www.coalindia.in/Business.aspx?tab=2.
---------------------------------------------------------------------------

    We valued truck freight expenses using an Indian per-unit average 
rate calculated from data on the following Web site: http://www.infobanc.com/logistics/logtruck.htm.\69\ The logistics section of 
this Web site contains inland freight truck rates between many large 
Indian cities. We did not inflate this rate since it is contemporaneous 
with the POR.
---------------------------------------------------------------------------

    \69\ See Factor Valuation Memorandum.
---------------------------------------------------------------------------

    We valued brokerage and handling using a price list of export 
procedures necessary to export a standardized cargo of goods in India. 
The price list is compiled based on a survey case study of the 
procedural requirements for trading a standard shipment of goods by 
ocean transport in India that is published in Doing Business 2010: 
India, published by the World Bank.\70\
---------------------------------------------------------------------------

    \70\ See Factor Valuation Memorandum.
---------------------------------------------------------------------------

    We valued marine insurance using the price quote retrieved from RJG 
Consultants, online at http://www.rjgconsultants.com/163.html, a 
market-economy provider of marine insurance.\71\ We did not inflate 
this rate since it is contemporaneous with the POR
---------------------------------------------------------------------------

    \71\ See Factor Valuation Memorandum.
---------------------------------------------------------------------------

    19 CFR 351.408(c)(4) directs the Department to value overhead, 
general, and administrative expenses (``SG&A''), and profit using non-
proprietary information gathered from producers of identical or 
comparable merchandise in the surrogate country. In this administrative 
review, Petitioner placed the 2008-2009 financial statements on the 
record for one Indian producer of aluminum products--National Aluminum 
Company Limited (``NALCO''), and one producer of zinc products--
Hindustan Zinc Limited (``Hindustan Zinc''). TMI placed the 2008-2009 
financial statements on the record for five Indian producers of 
aluminum products: Madras Aluminum Company Ltd. (``MALCO''), HINDALCO 
Industries Limited (``HINDALCO''), Century Extrusions Ltd. 
(``Century''), Sudal Industries Ltd. (``Sudal''), and Bhoruka Aluminum 
(``Bhoruka'').
    For the following reasons, we have determined not to rely on the 
2008-2009 audited financial statements of MALCO, HINDALCO, Hindustan 
Zinc, NALCO, Century and Bhoruka as surrogate financial statements 
under 19 CFR 351.408(c)(4). First, we determined not to rely on MALCO's 
audited financial statements because MALCO suspended production of 
aluminum and alumina in November 2008, seven months into its fiscal 
year (and the POR).\72\ In addition, since it suspended aluminum and 
alumina production, it switched the use of its power generation from 
captive consumption to external sales.\73\ As a result, the financial 
statements do not reflect the cost experience of producing a product 
comparable to the subject merchandise for five months of the POR.
---------------------------------------------------------------------------

    \72\ See The Madras Aluminum Company Limited, 49th Annual report 
2008-09, at 4, contained in TMI's SV Comments at Exhibit SV-11D. 
MALCO's fiscal year coincides with the POR.
    \73\ See id. at 4.
---------------------------------------------------------------------------

    Second, we have determined not to rely on the financial statements 
of HfNDALCO, NALCO, and Century because the record indicates that 
during this period these companies received subsidies the Department 
has previously determined to be countervailable. Congress indicated 
that the Department should ``avoid using any prices which it had reason 
to believe or suspect may be dumped or subsidized prices.'' \74\ 
Consistent with this Congressional directive, the Department's practice 
is to not use financial statements of a company that we have reason to 
believe or suspect may have received subsidies, where there are other 
sufficient reliable and representative data on the record for purposes 
of calculating the surrogate financial ratios, because the financial 
statements of companies receiving actionable subsidies are less 
representative of the financial experience of the relevant industry 
than the ratios derived from financial statements that do not contain 
evidence

[[Page 34696]]

of subsidization.\75\ In this case, HINDALCO's 2008-2009 financial 
statements indicate that HINDALCO received benefits under the Duty Free 
Import Entitlement Scheme (``EPCG Scheme'').\76\ Similarly, NALCO's 
financial statements indicate that NALCO received benefits under the 
Duty Entitlement Pass Book (``DEPB Premium'') \77\ and obtained EPCG 
licenses.\78\ Century's audited financial statements demonstrated that 
it also received benefits under the EPCG Scheme.\79\ India's EPCG 
Scheme and DEPB Premiums each have been found by the Department to 
provide a countervailable subsidy.\80\ Third, we rejected Bhoruka's 
audited financial statements because they did not show a profit for the 
2008-2009 fiscal years.\81\ The Department has an established practice 
of not relying on financial statements that are unprofitable.\82\ 
Fourth, we have determined not to use the 2008-2009 financial 
statements of Hindustan Zinc because Hindustan Zinc has four captive 
mines and did not include the cost of materials produced on its income 
statement.\83\
---------------------------------------------------------------------------

    \74\ Omnibus Trade and Competitiveness Act of 1988, H.R. Rep. 
No. 576, 100th Cong., 2nd Sess., at 59091 (1988).
    \75\ See Certain Steel Threaded Rod from the People's Republic 
of China: Final Determination of Sales at Less Than Fair Value, 74 
FR 8907 (February 27, 2009), and accompanying Issues and Decision 
Memorandum at Comment 1; Certain New Pneumatic Off-The-Road Tires 
from the People's Republic of China: Final Affirmative Determination 
of Sales at Less Than Fair Value and Partial Affirmative 
Determination of Critical Circumstances, 73 FR 40485 (July 15, 2008) 
(``OTR Tires'') at Comment 17A; Certain Frozen Warmwater Shrimp From 
the People's Republic of China: Notice of Final Results and 
Rescission, in Part, of 2004/2006 Antidumping Duty Administrative 
and New Shipper Reviews, 72 FR 52049 (September 12, 2007) at Comment 
2, citing Freshwater Crawfish Tail Meat From the People's Republic 
of China: Notice of Final Results And Rescission, In Part, of 2004/
2005 Antidumping Duty Administrative and New Shipper Reviews, 72 FR 
19174 (April 17, 2007), and accompanying Issues and Decision 
Memorandum at Comment 1.
    \76\ See Annual Report 2008-2009, Hindalco Industries Limited, 
at 91 contained in TMI's SV Comments at Exhibit SV-11E.
    \77\ See 28th Annual Report 2008-2009, National Aluminum Company 
Limited, at 71 contained in Petitioner's SV Comments at Exhibit 5.
    \78\ See id. at 72.
    \79\ See Century Extrusion Limited, Twenty First Annual Report 
2008-2009, at pages 35 and 41, in TMJ's SV Comments at Exhibit SV-
11B.
    \80\ See e.g., Certain Iron-Metal Castings From India: 
Preliminary Results and Partial Rescission of Countervailing Duty 
Administrative Review, 64 FR 61592 (November 12, 1999), unchanged in 
Certain Iron-Metal Castings from India: Final Results of 
Countervailing Duty Administrative Review, 65 FR 31515 (May 18, 
2000); see also http://ia.ita.doc.gov/esel/eselframes.html; and 
Notice of Final Affirmative Countervailing Duty Determination and 
Final Negative Critical Circumstances Determination: Certain Lined 
Paper Products from India, 71 FR 45034 (August 8, 2006), and 
accompanying Issues and Decision Memorandum at ``Benchmarks for 
Loans and Discount Rate.''
    \81\ See 29th Annual Report 2008-09, Bhoruka Aluminum Limited, 
at 31 contained in TMI's SV Comments at Exhibit SV-11C.
    \82\ See OTR Tires at Comment 17A.
    \83\ See Annual Report 2008-09, Hindustan Zinc Limited, at 61, 
79 and 93, contained in Petitioner's SV Comments at Exhibit 6.
---------------------------------------------------------------------------

    As a result, we have preliminarily determined to use the 2008-2009 
audited financial statements of Sudal as the basis of the financial 
ratios in this review. Sudal is a secondary aluminum extrusion 
manufacturer that used, purchased, or imported aluminum metals as raw 
materials to manufacture aluminum extrusions and fabricated products; 
\84\ Sudal earned a profit; \85\ and there is no record evidence to 
indicate that it received benefits that the Department has determined 
to be countervailable.\86\ Further, its audited financial statements 
are complete and are sufficiently detailed to disaggregate materials, 
labor, overhead, and SG&A expenses.\87\
---------------------------------------------------------------------------

    \84\ Annual Report 2008-2009, Sudal Industries Limited, at 33 
contained in TMI's SV Comments at Exhibit SV-1 1A.
    \85\ See Annual Report 2008-2009, Sudal Industries Limited, at 
19 contained in TMI's SV Comments at Exhibit SV-1 1A. See also 
Century Extrusions Ltd., at 33 contained in TMI's SV Comments at 
Exhibit SVI1B.
    \86\ See id.
    \87\ See id. See also the appropriate schedules to the financial 
statements as indicated on page 33 for Century and page 19 for 
Sudal.
---------------------------------------------------------------------------

    While the Department has not previously determined whether the 
production process for extruded aluminum is similar to that of pure 
magnesium for purposes of calculating surrogate financial ratios, we 
find that it is the best available information on the record. While it 
is the Department's practice to reject financial statements of 
surrogate producers whose production process is not comparable to the 
respondent's production process when better information is 
available,\88\ there is insufficient evidence to conclude in this case 
that production processes at issue are too dissimilar for purposes of 
using the Sudal financial statements. Accordingly, we invite parties to 
provide additional information and explanation on the record concerning 
the comparability of the manufacturing process for pure magnesium and 
extruded aluminum products, and to provide additional suitable 
financial statements from Indian producers of comparable merchandise.
---------------------------------------------------------------------------

    \88\ See, e.g., Persulfates from the People's Republic of China: 
Final Results of Antidumping Duty Administrative Review, 70 FR 6836 
(February 9, 2005), and accompanying Issues and Decision Memorandum 
at Comment 1.
---------------------------------------------------------------------------

    For a complete listing of all the inputs and a detailed discussion 
about our SV selections, see the Factor Valuation Memorandum.

Currency Conversion

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

Use of Facts Available and Adverse Facts Available (``AFA'')

    Section 776(a) of the Act provides that the Department shall apply 
``facts otherwise available'' if (1) necessary information is not on 
the record, or (2) 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 of the Act, (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.

[[Page 34697]]

Application of Total AFA to the PRC-Wide Entity

    Because TXR and Pan Asia did not respond to the Department's 
antidumping duty questionnaire, we preliminarily determine that these 
companies' withheld information requested by the Department in 
accordance with sections 776(a)(2)(A) and (B) of the Act. Furthermore, 
these companies' refusal to participate in the review significantly 
impeded the proceeding in accordance with section 776(a)(2)(C) of the 
Act. Specifically, had TXR and Pan Asia participated in the review, the 
Department would have determined whether they were entitled to a 
separate rate and calculated company specific dumping margins for these 
companies.
    Thus, because there is no information on the record demonstrating 
TXR's or Pan Asia's entitlement to a separate rate in accordance with 
section 776(a) of the Act, the Department has preliminarily treated 
these companies as part of the PRC-Wide Entity.
    Further, because these parties did not respond to the Department's 
antidumping questionnaire and are part of the PRC-Wide Entity, the 
Department is basing the dumping margin of the PRC-Wide Entity on the 
facts otherwise available on the record. Furthermore, the PRC-Wide 
Entity's refusal to provide the requested information constitutes 
circumstances under which it is reasonable to conclude that less than 
full cooperation has been shown.\89\ Hence, pursuant to section 776(b) 
of the Act, the Department has determined that, when selecting from 
among the facts otherwise available, an adverse inference is warranted 
with respect to the PRC-Wide Entity.
---------------------------------------------------------------------------

    \89\ See Nippon Steel Corporation v, United States, 337 F.3d 
1373, 1383 (Fed. Cir. 2003), where the Court of Appeals for the 
Federal Circuit provided an explanation of the ``failure to act to 
the best of its ability'' standard noting that the Department need 
not show intentional conduct existed on the part of the respondent, 
but merely that a ``failure to cooperate to the best of a 
respondent's ability'' existed (i.e., information was not provided 
``under circumstances in which it is reasonable to conclude that 
less than full cooperation has been shown'').
---------------------------------------------------------------------------

Selection of AFA Rates

    In deciding which facts to use as AFA, section 776(b) of the Act 
and 19 CFR 351.308(c)(l) provide that the Department may rely on 
information derived from (1) the petition, (2) a final determination in 
the investigation, (3) any previous review or determination, or (4) any 
information placed on the record. The Department's practice is to 
select an AFA 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 information in a timely 
manner'' and that ensures ``that the party does not obtain a more 
favorable result by failing to cooperate than if it had cooperated 
fully.\90\ Specifically, the Department's practice in reviews, in 
selecting a rate as total AFA, is to use the highest rate on the record 
of the proceeding which, to the extent practicable, can be corroborated 
(assuming the rate is based on secondary information).\91\ The Court of 
International Trade and the Court of Appeals for the Federal Circuit 
have affirmed decisions to select the highest margin from any prior 
segment of the proceeding as the AFA rate on numerous occasions.\92\ 
Therefore, as AFA, the Department has preliminarily assigned the PRC-
Wide Entity a dumping margin of 111.73 percent. This margin is the 
highest calculated rate for a respondent on the record of any segment 
of the proceeding.\93\
---------------------------------------------------------------------------

    \90\ See Notice of Final Determination of Sales at Less than 
Fair Value: Static Random Access Memory Semiconductors From Taiwan, 
63 FR 8909, 8911 (February 23, 1998); 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) and the SAA 
at 870.
    \91\ See Glycine from the People's Republic of China: 
Preliminary Results of Antidumping Duty Administrative Review, 74 FR 
15930, 15934 (April 8, 2009), unchanged in Glycine From the People's 
Republic of China: Final Results of Antidumping Duty Administrative 
Review, 74 FR 41121 (August 14, 2009); see also Fujian Lianfu 
Forestry Co., Ltd. v. United States, 638 F. Supp. 2d 1325, 1336 (CIT 
August 10, 2009) (``Commerce may, of course, begin its total AFA 
selection process by defaulting to the highest rate in any segment 
of the proceeding, but that selection must then be corroborated, to 
the extent practicable.'').
    \92\ See e.g. NSK Ltd. v. United States, 346 F. Supp. 2d 1312, 
1335 (Ct. Int'l Trade 2004) (affirming a 73.55 percent total AFA 
rate, the highest available dumping margin from a different 
respondent in the investigation); Kompass Food Trading International 
v. United States, 24 CIT 678, 683-84 (2000) (affirming a 51.16 
percent total AFA rate, the highest available dumping margin from a 
different, fully cooperative respondent); and Shanghai Taoen 
International Trading Co., Ltd. v. United States, 360 F. Supp. 2d 
1339, 1348 (Ct. Int'l Trade 2005) (affirming a 223.01 percent total 
AFA rate, the highest available dumping margin from a different 
respondent in a previous administrative review).
    \93\ See Pure Magnesium 06-07.
---------------------------------------------------------------------------

Corroboration of Secondary Information

    Section 776(c) of the Act provides that, when the Department relies 
on secondary information rather than on information obtained in the 
course of an investigation or review, it shall, to the extent 
practicable, corroborate that information from independent sources that 
are reasonably at its disposal. Secondary information is defined as 
information derived from the petition that gave rise to the 
investigation or review, the final determination concerning the subject 
merchandise, or any previous review under section 751 concerning the 
subject merchandise.\94\ Corroborate means that the Department will 
satisfy itself that the secondary information to be used has probative 
value.\95\ To corroborate secondary information, the Department will, 
to the extent practicable, examine the reliability and relevance of the 
information to be used.\96\ Independent sources used to corroborate 
such evidence may include, for example, published price lists, official 
import statistics and customs data, and information obtained from 
interested parties during the particular investigation.\97\
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    \94\ See SAA at 870.
    \95\ See id.
    \96\ See Tapered Roller Bearings and Parts Thereof Finished and 
Unfinished, From Japan, and Tapered Roller Bearings, Four Inches or 
Less in Outside Diameter, and Components Thereof From Japan: 
Preliminary Results of Antidumping Duty Administrative Reviews and 
Partial Termination of Administrative Reviews, 61 FR 57391, 57392 
(November 6, 1996), unchanged in Tapered Roller Bearings and Parts 
Thereof Finished and Unfinished, From Japan, and Tapered Roller 
Bearings, Four Inches or Less in Outside Diameter, and Components 
Thereof From Japan; Final Results of Antidumping Duty Administrative 
Reviews and Termination in Part, 62 FR 11825 (March 13, 1997).
    \97\ See Notice of Preliminary Determination of Sales at Less 
Than Fair Value: High and Ultra-High Voltage Ceramic Station Post 
Insulators from Japan, 68 FR 35627, 35629 (June 16, 2003), unchanged 
in Notice of Final Determination of Sales at Less Than Fair Value: 
High and Ultra High Voltage Ceramic Station Post Insulators from 
Japan, 68 FR 62560 (November 5, 2003); and Notice of Final 
Determination of Sales at Less Than Fair Value: Live Swine From 
Canada, 70 FR 12181, 12183-84 (March 11, 2005).
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    The 111.73 percent AFA rate is the highest calculated rate on the 
record of any segment of the proceeding.\98\ No additional information 
has been presented in the current review which calls into question the 
reliability of the information. This rate was calculated for a 
mandatory respondent in the 06-07 administrative review of pure 
magnesium and was assigned to TMI as AFA in the last completed segment 
of the proceeding. Thus, we have determined this information continues 
to be reliable.
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    \98\ See Pure Magnesium 06-07.
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    With respect to the relevance aspect of corroboration, the 
Department will consider information reasonably at its disposal to 
determine whether a margin continues to have relevance. Where 
circumstances indicate that the selected margin is not appropriate as 
AFA, the Department will disregard the margin

[[Page 34698]]

and determine an appropriate margin.\99\ Similarly, the Department does 
not apply a margin that has been discredited.\100\ To assess the 
relevancy of the rate used, the Department compared the transaction-
specific margins calculated for TMI in the instant administrative 
review with the 111.73 percent rate calculated in the 06-07 review of 
pure magnesium. The Department found that the 111.73 percent margin was 
within the range of the margins calculated on the record of the instant 
administrative review. Since the 111.73 percent margin is within the 
range of transaction-specific margins on the record of this 
administrative review, the Department has determined that the 111.73 
percent margin continues to be relevant for use as an AFA rate for the 
PRC-Wide Entity in this administrative review.
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    \99\ See Fresh Cut Flowers From Mexico; Final Results of 
Antidumping Duty Administrative Review, 61 FR 6812, 6814 (February 
22, 1996) (where the Department disregarded the highest margin in 
that case as adverse best information available (the predecessor to 
facts available) because the margin was based on another company's 
uncharacteristic business expense resulting in an unusually high 
margin).
    \100\ See D & L Supply Co. v. United States, 113 F.3d 1220, 1221 
(Fed. Cir. 1997) (ruling that the Department will not use a margin 
that has been judicially invalidated).
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    As the adverse margin is both reliable and relevant, the Department 
has determined that it has probative value. Accordingly, the Department 
has determined that this rate meets the corroboration criterion 
established in section 776(c) of the Act.

Duty Absorption

    Section 751(a)(4) of the Act provides for the Department, if 
requested, to determine during an administrative review initiated two 
or four years after publication of the order, whether antidumping 
duties have been absorbed by a foreign producer or exporter, if the 
subject merchandise is sold in the United States through an affiliated 
importer. See also, 19 CFR 351.213(j). On July 24, 2009, Petitioner 
requested that the Department determine whether TMI had absorbed 
antidumping duties for U.S. sales of pure magnesium made during the 
POR. Since the instant review was initiated more than four years after 
publication of the pure magnesium order, this request is untimely and, 
as such, we have not conducted a duty absorption analysis.

Weighted-Average Dumping Margins

    The preliminary weighted-average dumping margin is as follows:

                      Magnesium Metal From the PRC
------------------------------------------------------------------------
                                                            Weighted-
                       Exporter                          average margin
                                                          (percentage)
------------------------------------------------------------------------
Tianjin Magnesium International Co. Ltd...............             15.23
PRC-Wide Entity **....................................           111.73
------------------------------------------------------------------------
** Pan Asia and TXR are part of this PRC-Wide Entity.

Disclosure

    The Department will disclose calculations performed for these 
preliminary results to the parties within five days of the date of 
publication of this notice in accordance with 19 CFR 351.224(b). Any 
interested party may request a hearing within 30 days of publication of 
these preliminary results.\101\ If a hearing is requested, the 
Department will announce the hearing schedule at a later date. 
Interested parties may submit case briefs and/or written comments no 
later than seven days after the release of the verification report 
issued in this review.\102\ Rebuttal briefs and rebuttals to written 
comments, limited to issues raised in such briefs or comments, may be 
filed no later than five days after the time limit for filing the case 
briefs.\103\ Further, we request that parties submitting written 
comments provide the Department with an additional electronic copy of 
those comments on a CD-ROM. The Department intends to issue the final 
results of this administrative review, which will include the results 
of its analysis of issues raised in all comments, and at a hearing, 
within 120 days of publication of these preliminary results, pursuant 
to section 751(a)(3)(A) of the Act.
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    \101\ See 19 CFR 351.310(c).
    \102\ See 19 CFR 351.309(c)(ii).
    \103\ See 19 CFR 351.309(d).
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Assessment Rates

    The Department will determine, and CBP shall assess, antidumping 
duties on all appropriate entries of subject merchandise in accordance 
with the final results of this review.\104\ For assessment purposes, we 
calculated importer- or customer-specific assessment rates for 
merchandise subject to this review. We calculated an ad valorem rate 
for each importer or customer by dividing the total dumping margins for 
reviewed sales to that party by the total entered value associated with 
those transactions. For duty assessment rates calculated on this basis, 
we will direct CBP to assess the resulting ad valorem rate against the 
entered customs values for the subject merchandise. Where appropriate, 
we calculated a per-unit rate for each importer or customer by dividing 
the total dumping margins for reviewed sales to that party by the total 
sales quantity associated with those transactions. For duty-assessment 
rates calculated on this basis, we will direct CBP to assess the 
resulting per-unit rate against the entered quantity of the subject 
merchandise. Where an importer- or customer-specific assessment rate is 
de minimis (i.e., less than 0.50 percent) in accordance with the 
requirement of 19 CFR 351.106(c)(2), the Department will instruct CBP 
to assess that importer's or customer's entries of subject merchandise 
without regard to antidumping duties. We intend to instruct CBP to 
liquidate entries containing subject merchandise exported by the PRC-
wide entity at the PRC-wide rate we determine in the final results of 
this review. The Department intends to issue appropriate assessment 
instructions directly to CBP 15 days after publication of the final 
results of this review.
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    \104\ See 19 CFR351.212(b).
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Cash Deposit Requirements

    The following cash deposit requirements will be effective upon 
publication of the final results of this administrative review for 
shipments of the subject merchandise from the PRC entered, or withdrawn 
from warehouse, for consumption on or after the publication date, as 
provided by sections 751(a)(2)(C) of the Act: (1) For TMI, which has a 
separate rate, the cash deposit rate will be that established in the 
final results of this review (except, if the rate is zero or de 
minimis, zero cash deposit will be required); (2) for previously 
investigated or reviewed PRC and non-PRC exporters not listed above 
that received a separate rate in a prior segment of this proceeding, 
the cash deposit rate will continue to be the exporter-specific rate; 
(3) for all PRC exporters of subject merchandise that have not been 
found to be entitled to a separate rate, the cash deposit rate will be 
the PRC-wide rate of 111.73 percent; and (4) for all non-PRC exporters 
of subject merchandise which have not received their own rate, the cash 
deposit rate will be the rate applicable to the PRC exporter that 
supplied that non-PRC exporter. These deposit requirements, when 
imposed, shall remain in effect until further notice.

Notification to Importers

    This notice serves as a preliminary reminder to importers of their 
responsibility under 19 CFR 351.402(f)(2) to file a certificate 
regarding the reimbursement of

[[Page 34699]]

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

    Dated: June 7, 2010.
Ronald K. Lorentzen,
Deputy Assistant Secretary for Import Administration.
[FR Doc. 2010-14391 Filed 6-17-10; 8:45 am]
BILLING CODE 3510-DS-M