Before Plager, Schall, and Gajarsa, Circuit Judges.
The opinion of the court was delivered by: Gajarsa, Circuit Judge.
Appealed from: United States Court of International Trade Judge Donald C. Pogue
Magnesium Corporation of America, the International Union of Operating Engineers, Local 564, and the United Steelworkers of America, Local 8319, (collectively "MagCorp") challenge the determination of the Department of Commerce that magnesium from the Russian Federation was not being sold at less than fair market value in the United States. See Notice of Final Determinations of Sales at Less Than Fair Value: Pure Magnesium and Alloy Magnesium From the Russian Federation, 60 Fed. Reg. 16,440 (Mar. 30, 1995) ("Final Determination"); Notice of Amended Antidumping Duty Order: Pure Magnesium From the Russian Federation; Notice of Amended Final Determination of Sales at Less Than Fair Value: Antidumping Duty Investigation of Pure Magnesium from the Russian Federation, 60 Fed. Reg. 65,635 (Dec. 20, 1995) ("Amended Final Determination"); Remand Determination: Magnesium Corp. of America, et al. v. United States, No. 94-06-00789 (Oct. 28, 1996) ("Remand Determination").
MagCorp initially appealed Commerce's Amended and Final Determinations. The Court of International Trade affirmed all but two of Commerce's determinations, remanding with respect to (1) the calculation of selling, general and administrative ("SG & A") expenses, and (2) the treatment of export taxes. See Magnesium Corp. of Am. v. United States, 938 F. Supp. 885 (Ct. Int'l Trade 1996) ("MagCorp I"). Commerce subsequently issued its "Remand Determination" addressing those two issues. MagCorp appealed the Remand Determination, challenging Commerce's refusal to deduct export taxes from the United States price where that tax is charged by a non-market economy government. The Court of International Trade affirmed. See Magnesium Corp. of Am. v. United States, 949 F. Supp. 870 (Ct. Int'l Trade 1996) ("MagCorp II").
MagCorp appeals the decision of the Court of International Trade and challenges Commerce's Final and Remand Determinations with respect to six issues: (1) electric rates, (2) export taxes, (3) SG & A expenses, (4) factory overhead costs (particularly electrolytic cell rebuild costs), (5) raw dolomite as a surrogate value for processed carnallite, and (6) by-product credits. For the reasons noted, we affirm.
On March 31, 1994, MagCorp petitioned the International Trade Administration of the United States Department of Commerce ("Commerce") alleging that magnesium from Russia was being sold in the United States at less than fair market value ("LTFV"). See MagCorp I, 938 F. Supp. at 887-88. Commerce determines if a product is sold at LTFV by comparing the United States price ("USP"), which is the purchase price in the United States, see 19 U.S.C. § 1677a(a) (1988), *fn1 with the foreign market value ("FMV"). See Final Determination, 60 Fed. Reg. at 16,441. If the USP is lower than the FMV, then Commerce may conclude that the product is being "dumped" on the United States market and may take appropriate action. Commerce initiated an investigation to determine if Russian magnesium, pure and alloy, was being sold or was likely to be sold at LTFV. Commerce solicited information from two Russian magnesium producers, Berezniki Titanium and Magnesium Works ("AVISMA") and Solikamsk Magnesium Works ("SMW"). See MagCorp I, 938 F. Supp. at 888.
For the purposes of this investigation, Commerce determined that Russia is a non-market economy ("NME"). *fn2 See Final Determination, 60 Fed. Reg. at 16,443. As the Court of International Trade noted, "[t]he prices of the goods produced in an NME are subject to discrepancies which distort their value." MagCorp I, 938 F. Supp. at 890. Consequently, the costs of production in a non-market economy cannot be used to determine the FMV of any product. Although the Russian producers argued that the Russian magnesium industry is characterized by market-driven prices, and therefore Russian magnesium should be evaluated under the rules established for market economies, Commerce concluded that this industry was not a "market oriented industry." See Final Determination, 60 Fed. Reg. at 16,443. This Conclusion was based, in part, on the fact that the Russian government admits continuing control of the magnesium industry through the Russian Federal Committee on Metallurgy. See id. In addition, the two Russian producers under investigation were, during the period of investigation, still partially owned by the Russian government. See id. Therefore, Russia was properly treated as a non-market economy for this investigation.
For the reasons stated above, Commerce cannot use the costs of production in Russia to determine if a product is being sold at LTFV in the United States. In such a situation, Commerce calculates the FMV according to 19 U.S.C. § 1677b(c). Under this section, the costs for the factors of production for magnesium were based on similar costs of production for a similar product from a surrogate free market country. See MagCorp I, 938 F. Supp. at 890. The surrogate country is to be "at a level of economic development comparable to that of the nonmarket economy country" and a "significant producer[ ] of comparable merchandise." See id. (quoting 19 U.S.C. § 1677b(c)(4)). In this case, Brazil was used as the surrogate for Russia because Brazil is a market economy country at a comparable level of economic development that produces a comparable product. See Notice of Preliminary Determinations of Sales at Less Than Fair Value and Postponement of Final Determinations: Pure and Alloy Magnesium From the Russian Federation, 59 Fed. Reg. 55,427, 55,430 (Nov. 7, 1994) ("Preliminary Determination").
In reviewing the judgment of the Court of International Trade, we apply the statutory standard anew to determine if Commerce's determinations are supported by substantial evidence. See Fujitsu Gen. Ltd. v. United States, 88 F.3d 1034, 1038 (Fed. Cir. 1996). However, we "'will not ignore the informed opinion of the Court of International Trade. That court reviewed the record in considerable detail. Its opinion deserves due respect.'" Gerald Metals, Inc. v. United States, 132 F.3d 716, 719 (Fed. Cir. 1997) (quoting Suramerica de Aleaciones Laminadas, C.A. v. United States, 44 F.3d 978, 983 (Fed. Cir. 1994)). We will sustain any determination, finding, or Conclusion of Commerce unless it is "unsupported by substantial evidence on the record, or otherwise not in accordance with law." 19 U.S.C. § 1516a(b)(1)(B) (1994); see Fujitsu, 88 F.3d at 1038. We address each issue presented on appeal in turn.
The production of magnesium requires a great deal of electricity, and the cost of that electricity constitutes a significant part of the cost of magnesium production. See MagCorp I, 938 F. Supp. at 892-93. Commerce stated in its Preliminary Determination that it used information reported by the United States Consulate in Belo Horizonte, Brazil. See Preliminary Determination, 59 Fed. Reg. at 55,431. However, the information provided by the Consulate was not publicly available published information ("PAPI"). See MagCorp I, 938 F. Supp. at 892-93. The use of PAPI is preferred in Commerce determinations. See id. at 894. In its Final Determination, Commerce relied on several PAPI sources that reported the electrical rates paid by Brazilian aluminum producers because aluminum production was considered as energy intensive as magnesium production. See Final Determination, 60 Fed. Reg. at 16, 446; see also MagCorp I, 938 F. Supp. at 894-95. The PAPI sources upon which Commerce relied included an American Metal Market article on the rates paid by Brazilian aluminum producers, the Tariff Bulletin published by the Brazilian Ministry of Mines and Energy showing electricity rates provided by Electrobras, *fn3 and the Diaro Official. *fn4 See id. at 893 n.32.
MagCorp challenges the propriety of using rates paid by Brazilian aluminum producers as surrogates for rates paid by Russian magnesium producers because the Russian magnesium producers do not use enough electricity to qualify for the lowest industrial rates available to Brazilian aluminum producers. In its surrogate calculation, Commerce is required to determine the FMV of the merchandise at issue and can do so on the basis of the production costs of merchandise which is "comparable to the merchandise under investigation." 19 U.S.C. § 1677b(c)(2). Based on this section, it was reasonable for Commerce to treat both Russian magnesium producers and Brazilian aluminum producers as "large industrial users" of electricity. Indeed, MagCorp has invited the comparison between magnesium and aluminum production at other stages of this action. *fn5 Commerce found that the Russian magnesium producers' minimum peak usage was enough to qualify for the "large industrial user" rate paid by Brazilian aluminum producers. See Final Determination, 60 Fed. Reg. at 16,446. Although aluminum producers may actually consume more electricity, Commerce did show that the Russian ...