Background
The case arose from the Commerce Department’s administrative review of a countervailing duty order covering phosphate fertilizers from Russia. Commerce examined whether the Russian government provided mining rights to fertilizer producer Joint Stock Company Apatit for less than adequate remuneration. Its original tier-three benchmark compared Apatit’s phosphate-rock cost buildup with world prices for rock derived from igneous ore, producing a 26.78% subsidy rate for the mining-rights program and a total countervailable subsidy rate of 28.50%.
In two earlier opinions, the Court of International Trade found that Commerce had not supported its exclusion of sedimentary-origin phosphate rock. On the second remand, Commerce reopened the record, concluded that bone phosphate of lime content—not whether the rock came from igneous or sedimentary ore—principally drives world phosphate-rock prices, and added Iranian and Togolese sedimentary-rock export data to its benchmark. The revised calculation found no measurable benefit from the mining rights and reduced Apatit’s total subsidy rate to 22.86%.
The Court’s Holding
The court sustained Commerce’s second remand results. It held that Commerce reasonably evaluated the supplemented record and adequately supported its conclusion that differences between igneous and sedimentary beneficiation processes do not significantly drive phosphate-rock market prices when bone phosphate of lime content is taken into account.
The court rejected The Mosaic Company’s argument that evidence of greater purity, lower downstream processing costs, and possible premiums for igneous-origin rock required Commerce to exclude sedimentary-rock prices. Mosaic had not identified persuasive export-price data showing that ore origin significantly affects market prices after controlling for phosphate content. Commerce therefore reasonably included Iranian and Togolese prices in the tier-three benchmark.
Key Takeaways
- Commerce may include both igneous- and sedimentary-origin phosphate-rock prices in a benchmark when substantial evidence shows that phosphate content, rather than ore origin, principally drives market prices.
- Evidence that some purchasers may value igneous rock’s purity did not establish a marketwide, ore-origin price distinction after controlling for bone phosphate of lime content.
- Commerce acted within its discretion by reopening the administrative record on remand because the court had not prohibited it from requesting and evaluating new factual information.
Why It Matters
The decision illustrates the evidentiary showing required to challenge Commerce’s selection of benchmark data in countervailing duty proceedings. Evidence of production differences or specialized purchasing preferences may be insufficient without reliable market-price data demonstrating that those differences materially affect prices.
The ruling also sustains a consequential recalculation for Apatit: adding sedimentary-origin export data eliminated the measurable benefit attributed to the Russian mining-rights program and lowered the company’s total countervailable subsidy rate from 28.50% to 22.86% for the review period.