Exhibit D-01 PUB Case Brief of Rio Tinto Alcan...PUBLIC 1 I. INTRODUCTION 1. This Case Brief is...

CANADIAN INTERNATIONAL TRADE TRIBUNAL

In the Matter of: Inquiry NQ-2017-001 Respecting Silicon Metal Originating in or Exported from the Federative Republic of Brazil, the Republic of Kazakhstan, Lao People's Democratic Republic, Malaysia, the Kingdom of Norway and the Kingdom of Thailand, and subsidizing of the above-mentioned goods originating in or exported from the Federative Republic of Brazil, the Republic of Kazakhstan, Malaysia, the Kingdom of Norway and the Kingdom of Thailand.

Exhibit D-01

PUBLIC CASE BRIEF FILED ON BEHALF OF RIO TINTO ALCAN INC.

BENNETT JONES LLP3400 One First Canadian PlaceP.O. Box 130Toronto, Ontario, Canada M5X 1A4

Telephone: (416) 863-1200Facsimile: (416) 863-1716

Jesse I. Goldman Darrel H. PearsonJessica B. HorwitzJessica RobertsJulia Webster

Counsel to Rio Tinto Alcan Inc.

Table of ContentsI. INTRODUCTION 1

B. Summary of RTA position 1 C. Background 3

II. OVERVIEW OF RTA 7 III. SILICON METAL – BACKGROUND 9

A. Subject Goods – Product Definition 9 B. Silicon Metal and its Uses 9 C. Technical Specifications and Grades 11 D. Production of Silicon Metal 14 E. Pricing 15

IV. THE CANADIAN SILICON METAL MARKET 18 A. Canadian Supply and Demand of Silicon Metal 18 B. Canadian and Global Demand Trends 20 C. Aluminum Industry Demand 26 D. RTA Procurement Process 26 E. Factors Influencing RTA Procurement Decisions 28

V. LEGAL TEST 30 VI. INJURY NOT CAUSED BY DUMPED OR SUBSIDIZED GOODS 31

A. Price of Imported Goods and Price of Domestic Goods Determined on Different Basis 31

B. Import Volumes of Dumped and/or Subsidized Goods Were Coincidental and Have No Causal Link to Injury 40

C. Factors Other than The Imports of Dumped or Subsidized Goods into Canada that Caused Injury 49

D. Injury Was Not Material 62 E. Note Regarding CBSA Preliminary Determination 63

VII. NO IMMINENT OR FORESEEN THREAT OF FUTURE INJURY 64 VIII. CONCLUSION 72

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I. INTRODUCTION

1. This Case Brief is filed on behalf of Rio Tinto Alcan Inc. ("RTA"), a Canadian

manufacturer of aluminium products and a Canadian importer and purchaser of subject and

like goods.

2. On the basis of the evidence before the Canadian International Trade Tribunal ("CITT" or

"Tribunal") in this proceeding and in light of the factors that the Tribunal is authorized to

take into account under subsection 37.1 of the Special Import Measures Regulations

("SIMR"),1 RTA submits that the dumping and subsidization of the subject goods have not

caused and do not threaten to cause injury to Quebec Silicon Limited Partnership ("QSLP")

and QSIP Canada ULC ("QSIP") (collectively, "Quebec Silicon" or the "Complainant").

B. Summary of RTA position

3. RTA respectfully submits that the evidence before the Tribunal in this inquiry, as discussed

in detail with supporting evidence and references in the submissions that follow,

demonstrates the following:

4. That the dumped/subsidized price of imports into Canada were not a cause of alleged

material injury suffered by the Complainant, and do not pose an imminent or foreseeable

threat of future injury as alleged.

5. Given its short duration and lack of intensity against the backdrop of the 2014-2017 CITT

period of review, any alleged injury suffered has not arisen and will not arise to the level

of "materiality" required to make an affirmative finding.

1 SOR/84-927.

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6. Importations of allegedly dumped/subsidized goods entered Canada contemporaneously or

coincidentally with the injury claimed by the Complainant, but there is no causal link

between subject imports and injury claimed.

7. Prices and volumes of subject goods are negotiated apart from domestic goods as a separate

procurement stream, and are priced based on a different methodology.

8. Any injury suffered by the Complainant is as a result of factors unrelated to dumping or

subsidization, notably:

(i) Severely depressed U.S. Midwest pricing in 2016 influenced by domestic and

imported supply in the United States.

(ii) Exchange rate fluctuation (appreciation of the U.S. dollar, which is the currency in

which silicon metal is traded worldwide, including in Canada) on cost and price

competitiveness of foreign suppliers.

(iii) The imperative of silicon metal customers to maintain a diversified supply base for

security of supply purposes.

(iv) Reduced demand in downstream foundry alloy markets impacting demand for

domestically sourced silicon metal by aluminum producers such as RTA.

(v) Self-injury caused by cost inefficiencies, Ferroglobe, Plc (“Ferroglobe”) global

market allocation strategy, and QSIP's failure to diversify its customer base into

export markets including customers in the growing solar/chemical industry.

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C. Background

9. For reasons set out below, there is no causal link between dumped/subsidized pricing of

imports and price erosion or lost sales volume suffered, or to be suffered foreseeably in the

future, by the Complainant as a result of RTPS/RTA procurement decisions.

1. RTA silicon metal procurement is bifurcated

10. RTPS procures silicon metal for RTA from diversified sources as a matter of supply

security. Access to secure supply is important because world silicon metal supply for

foundry alloy is tenuous and inconsistent and is increasingly directed toward solar and

chemical applications.

11. Faced with challenges in procuring a diversified overall supply of silicon metal, in 2014,

RTPS introduced a bifurcated approach to sourcing silicon metal that divides sourcing of

RTA's needs between the Canadian producer, priced [ ], and

the balance from imports priced [

].

12. Given the trade remedy circumstances and lessons learned from the 2013 CITT decision,

RTPS does not engage in price negotiations with the Canadian producer based on import

prices. These negotiations are based on [ ]. Prices achieved

by the Complainant are not undermined by dumped/subsidized imports into Canada.

2. Decline in pricing in 2016 unrelated to competition in Canada

13. U.S. Midwest pricing is based on conditions in the U.S. market, not competition in the

Canadian market. U.S. Midwest price indices are based on Globe's U.S. pricing,

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Mississippi Silicon LLC (“Mississippi Silicon”) pricing, and import pricing into the United

States, not by the prices of imports into Canada.

14. U.S. Midwest pricing declined significantly during the portion of the period of review that

coincides with the injury suffered by the Complainant. Prices negotiated by RTPS

consistently [

].

15. Injury is also partially explained by the movement of exchange rates. During the period of

review, the U.S. dollar appreciated considerably against most other currencies. Costs

incurred in U.S. dollars have forced prices in U.S. dollars upward in the U.S., and to some

extent in Canada. The U.S. Midwest price was relatively higher as a result reflected in

prices in 2014/15 and early 2016.

16. In contrast, the U.S. dollar depreciated in the latter part of 2016 and into 2017, which

caused costs and prices to fall in foreign dollar terms during the period during which injury

is claimed.

17. The currency factor, when added to the factor of U.S. domestic price competition between

Ferroglobe and Mississippi Silicon, explains the erosion of the U.S. Midwest price and

therefore pricing achieved in Canada by the Complainant [

].

3. Lost volume allegations are unfounded

18. The allegations made by the Complainant regarding volumes of sales displaced by imports

are unfounded. The relative volumes purchased and delivered from the Complainant vary

based on a number of non-price and non-import factors including [

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].

19. RTPS does not have a standard approach to procurement in terms of timing. It makes

decisions regarding purchase volumes [

].

Procurement of volumes from Canada and foreign sources sometimes coincide temporally,

but frequently they do not, and whether they do is coincidental.

4. Foundry alloy demand affects silicon metal demand

20. Another factor unrelated to subject imports that affects purchase volumes is foundry alloy

demand. Purchase volumes of silicon metal are driven by RTA's foundry alloy customers'

needs, and RTA's demand is maintained in part due to [

].

21. This is not a public interest argument because it is an economic demand factor that

indirectly affects demand in Canada for domestically produced silicon metal. If silicon

metal pricing does not permit RTA to make a profit on its foundry alloy production,

demand for silicon metal by RTA will fall. [

].

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5. The evidence discloses self-injury

22. To the extent that the Complainant is suffering material injury, its cause is and will continue

to also be self-made. The Complainant represents a small proportion of total multinational

production by its ultimate owner, Ferroglobe. Ferroglobe controls the markets to which

each of its business units may sell. The Complainant has publicly declared its focus on

Canada. There are only two significant customers in Canada. They are both in the

aluminum alloy business, only. The Complainant has not sold, and does not have plans to

diversify its customer base and sell to the chemical or solar application markets in the U.S.

or elsewhere, despite growing opportunities in such fields.

23. This means that the Complainant has little leverage, other than trade remedies, to increase

its profitability given it has only two significant customers. This also means that the

Complainant is limited in that it likely cannot export to markets where other Ferroglobe

business units already have coverage.

6. The alleged injury is not material

24. Even if alleged injury was suffered as a result of imports of dumped/subsidized goods, the

injury was not material. The period of review is from January, 2014 to the present. The

Complainant conceded in its reply to RFI requests that injury did not occur in 2014 or 2015

and manifested only in 2016. While the decline in pricing and profitability as depicted by

the Complainant in 2016 has been of an important magnitude, when viewed over the entire

period of review it is not material.

25. There are already signs of improving U.S. Midwest prices starting at the end of 2016, which

means [ ].

This is attributable to changes in the U.S. market, and not to the Canadian trade remedy

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investigation or to the U.S. trade remedy case. U.S. pricing was firming before the U.S.

preliminary determination of dumping, which has not yet occurred in the U.S. proceedings.

Canadian domestic sales volumes have also improved, unrelated to the Canadian trade

remedy investigation.

26. The Tribunal is precluded from making an affirmative finding of "threat of injury" unless

that threat is based on a change in circumstances that is foreseen and imminent. This

principle must not be applied based on mere speculation and must not be based on simple

fear on the part of the Complainant. The evidentiary threshold for a threat of injury finding

is appropriately high because of its exceptional nature.

27. The evidence does not point to any change in circumstance other than the firming of U.S.

Midwest prices due to conditions in the U.S. market. Foreign unused capacity did not cause

a deluge of imports in the past and will not in the future given the need to source domestic

silicon metal and demand for silicon metal elsewhere. RTA's bifurcated approach to pricing

and its strategy regarding allocation of volumes among suppliers is not expected to change

and therefore imports will continue to have no impact on Complainant prices or volumes.

In addition, the depreciation of the U.S. dollar will make the Complainant less vulnerable

to imports.

II. OVERVIEW OF RTA

28. The Rio Tinto Group ("Rio Tinto") is a leading international mining and metal company

with operations in more than 40 countries. It is structured as a dual-listed company, with

listings on the London Stock Exchange under the name Rio Tinto plc and the Australian

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Securities Exchange under the name Rio Tinto Limited.2 The dual-listed structure means

that the two companies, Rio Tinto plc and Rio Tinto Limited, are managed as a single

economic unit under common directors even though they are distinct legal entities with

separate share listings.

29. Rio Tinto Alcan Inc. ("RTA") is a wholly owned subsidiary of Rio Tinto plc and is

headquartered in Montreal, Québec. It was formed in November of 2007 by the merger of

the former Rio Tinto Aluminium Group and Alcan Inc. ("Alcan"). RTA's Canadian

predecessor company, Alcan, has been a major player in the Canadian aluminium market

since 1902.

30. RTA manages the Rio Tinto's aluminium product group, and is a global supplier of bauxite,

alumina, and aluminium. On a worldwide basis, RTA owns and operates seven bauxite

mines and deposits, five alumina refineries and five speciality alumina plants, 19

aluminium smelters, and employs 21,000 people in 24 countries.

31. RTA is one of the world's largest producers of aluminium with the bulk of its aluminium

operations located in Québec and British Columbia. RTA also has aluminium smelters in

Australia, New Zealand, France, the U.K., the U.S., Cameroon, Iceland, Oman, and

Norway. Its aluminium products include rolling slab (sheet ingot), extrusion billet, forging

stock, EC rod, foundry, and remelt ingot, as well as speciality products such as busbar

electrical conductors.

2 Rio Tinto plc was formerly called the RTZ Corporation plc, and Rio Tinto Limited was formerly called CRA Limited.

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32. RTA is a primary aluminum producer. Its largest use, by far, for silicon metal is for

production of foundry alloys in Canada.3 Its foundry aluminum alloy production is

exported, [ ] the United States and Mexico.

RTA's primary Canadian production facilities for foundry aluminum are located in Québec

at RTA's Alma smelter, Beauharnois casting house and Petits Lingots Saguenay ("PLS")

casting house.

III. SILICON METAL – BACKGROUND

A. Subject Goods – Product Definition

33. The subject goods are defined as:

Silicon metal containing at least 96.00% but less than 99.99% silicon by weight,and silicon metal containing between 89.00% and 96.00% silicon by weight that contains aluminum greater than .20% by weight, of all forms and sizes, originating in or exported from the Federative Republic of Brazil, the Republic of Kazakhstan, Lao People's Democratic Republic, Malaysia, the Kingdom of Norway and the Kingdom of Thailand, and subsidizing of the above-mentioned goods originating in or exported from the Federative Republic of Brazil, the Republic of Kazakhstan, Malaysia, the Kingdom of Norway and the Kingdom of Thailand ("subject goods").

B. Silicon Metal and its Uses

34. Silicon metal is a chemical element, metallic in appearance, solid in mass at room

temperature, and steel gray in color. Natural forms of silica include quartz mineral or

quartzite rock. Silicon metal, in various grades of purity, has application in thousands of

products across several industries, principally aluminium (primary and secondary

3 Tribunal Exhibit D-05: Public Witness Statement of Jean-Francois Laplante at para 12. Other uses include aluminum slab and billets, but these represent less than 10%.

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foundry), chemical (silicones and polysilicon for solar applications) and electronics

(semiconductors).4

35. In the aluminum industry, silicon metal is used as an alloying agent in the creation of

foundry alloys to enhance fluidity, increase resistance to hot-cracking and improve

pressure tightness and weldability. "Primary" aluminium alloys, made from raw aluminum,

are used in the manufacture of components that require higher purity aluminium, such as

automobile wheels and parts. Secondary aluminium applications (also known as "remelt"

aluminum) is manufactured from recycled aluminum and used in applications such as

automotive castings.5 Other applications for silicon metal include the production of brass,

bronze, steel, copper alloys, ceramic powders, and refractory coatings.6

36. RTA is a producer of primary aluminum foundry alloys in two forms, large "T form"

ingots, which are large blocks of aluminum alloy with a minimum size of 750kg, and "small

form" ingots, which are smaller aluminum alloy blocks of 14.7kg.7 T-form ingots are

principally used in the manufacture of automobile wheels, and small form ingots are used

primarily by manufacturers of light vehicle parts; a small percentage of small form ingots

is used in aerospace or other industrial sectors.8 In recent years, demand in the U.S. has

been increasingly shifting from T-form to small form.9

4 Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett, Confidential Attachment 3, CRU Silicon Metal Market Outlook Report (March 2017).

5 Tribunal Exhibit D-05: Public Witness Statement of Jean-Francois Laplante at para 7.6 Tribunal Exhibit D-05: Public Witness Statement of Jean-Francois Laplante at para 7.7 Tribunal Exhibit D-05: Public Witness Statement of Jean-Francois Laplante at para 11.8 Tribunal Exhibit D-05: Public Witness Statement of Jean-Francois Laplante at para 17.9 Tribunal Exhibit D-05: Public Witness Statement of Jean-Francois Laplante at para 24.

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37. In the chemical industry, silicon metal is used by companies such as Dow Corning

Corporation and Wacker Chemical to produce a category of chemicals called silicones.

These include silicone resins, lubricants, antifoaming agents and water-repellent

compounds, and are used to make products such as silicone rubber, lubricants, gaskets,

sealers, cosmetics, medical applications and textiles.10

38. In recent years, silicon metal has been widely used in the manufacture of solar panels for

the generation of electricity, which is a rapidly growing segment of the overall world

market for silicon metal with near double-digit growth.11 The silicon metal that is sold by

silicon producers for solar applications is a metallurgical grade that is further refined to

increase purity (this type of silicon metal is sometimes referred to as "polysilicon"). The

aluminium, chemical and solar industries respectively accounted for [ ]%, [ ]% and [ ]%

of worldwide demand for silicon metal in 2016, and are projected to represent [ ]%, [ ]%

and [ ]%, respectively by 2021.12

C. Technical Specifications and Grades

39. There are no industry-standard "grades" of silicon metal. The grade and value of silicon

metal is impacted by its "purity". Higher grades of silicon metal typically sell at higher

10 Tribunal Exhibit D-07, Public Attachment 1: Wacker Chemie AG, "Silicones – Properties and Applications"; Tribunal Exhibit D-07, Public Attachment 2: Dow Corning Corp., "Everyday Uses of Silicon-Based Products".

11 Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett, Confidential Attachment 3, CRU Silicon Metal Market Outlook Report (March 2017) at pages 4, 15.

12 Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett, Confidential Attachment 3, CRU Silicon Metal Market Outlook Report (March 2017) at page 19.

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prices and contain relatively less impurities (e.g. iron, calcium, aluminium, phosphorous

and/or sodium) on a percentage basis.13

40. There are a number of market intelligence firms14 that publish benchmark pricing for

silicon metal. These indices typically refer to "grades" of silicon metal that are named by

reference to their average iron, aluminum, calcium content, respectively. Grade "1101"

contains impurities up to a maximum 0.1% iron, 0.1% aluminum, and 0.01% calcium,

while 441 contains maximum 0.4% iron, 0.4% aluminum, and 0.1% calcium, and so on.15

Figure 1: Standard silicon metal chemical composition tolerances16

Fe Al Ca1101 <0.1% <0.1% <0.01%2202 <0.2% <0.2% <0.02%3303 <0.3% <0.3% <0.03%441 <0.4% <0.4% <0.1%553 <0.5% <0.5% <0.3%"Off-grade" Misc. composition

41. Individual customers specify their own maximum tolerances of impurities that the silicon

metal can contain, based on the application in which the silicon metal will be used. RTA

typically purchases four grades of silicon metal, as defined according to its own proprietary

specifications: (1) Grade 553, (2) Grade 441, (3) Grade 3303, and (4) Grade 2202 (and

[

13 Tribunal Exhibit D-03, Public Witness Statement of Mark Pickett at para 19.14 For example, Ryan's Notes, CRU, Metal Bulletin, Metal Pages, Platts, and China Metal Prices, among

others.15 Tribunal Exhibit D-03: Public Witness Statement of Mark Pickett at para 19. 16 Tribunal Exhibit D-03: Public Witness Statement of Mark Pickett at para para 19, Figure 1.

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]). An example of typical RTA specifications for silicon

metal is as follows:17

Figure 2: RTA grade specifications

Si [ ] [ ] [ ]1101 "high pure" [ ] [ ] [ ] [ ]2202 "extra refined" [ ] [ ] [ ] [ ]3303 "regular/refined" [ ] [ ] [ ] [ ]441 "half-refined" [ ] [ ] [ ] [ ]553 "standard" [ ] [ ] [ ] [ ]"Off-grade" Misc. composition, procured on case-by-case basis

42. For example, RTA does not have specific restrictions on aluminium content in its

specifications given that the silicon is used to produce foundry alloy and will be mixed

with raw aluminum (although the general purity requirement of minimum silicon content

still applies). Also, [

]. Grade

] is typically the grade used by RTA in the largest proportion, and [

] in its requests for quotation ("RFQs").18 The

quality of Canadian and foreign silicon metal is comparable, and most suppliers are capable

of producing silicon metal within the full range of RTA's specifications.19 Testing for

quality and consistency to ensure a supplier is capable of meeting technical requirements

is part of RTA's supplier qualification process.20

17 Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett at para 20.18 Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett at para 20, Figure 2.19 Tribunal Exhibit D-05: Public Witness Statement of Jean-Francois Laplante at para 13.20 Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett at para 22.

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D. Production of Silicon Metal

43. Silicon metal is produced by combining silicon quartz (SiO2), carbon reductants (coal,

charcoal and/or petroleum coke) and wood chips in an electric-arc furnace (which uses

consumable electrodes) to reduce the quartz and create molten metal. The smelting process

is extremely power intensive, and due to these energy requirements, most silicon metal

smelters seek locations in areas where there are abundant supplies of low-cost electricity.

The resultant molten metal is then refined by introducing oxygen (if applicable depending

on the type of silicon metal being produced), poured into a mould (onto a layer of silicon

metal dust or "fines"), and cooled. Once hardened, the metal is unmolded, crushed, sieved

and stored for shipment.

44. Production costs may vary depending on the type of silicon metal being produced. For

example, the oxidative refining step is not required for silicon metal produced for the

aluminum industry. Production costs also vary from producer to producer based on the

quality of coal and quartz obtained as an input.21 Many silicon metal producers are

advantaged by owning their own quartz and coal mines, while other source low-iron quartz

and/or low-ash coal to achieve greater furnace efficiencies and higher qualities of silicon

metal.

45. While the production process for silicon metal requires several raw materials and an

abundance of electricity, the end product is fairly easy to manufacture. As a result, the

subject goods are preponderantly manufactured in the developing world and sell with

narrow margins. Given these low margins and the volatility of raw material prices, silicon

21 Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett, Confidential Attachment 18, CRU Cost Data Service Report (May 2017).

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metal producers are inclined to use the subject goods as a feedstock or input in the

production of value added margin products where higher margins can be achieved. This is

reflected in the growing use of silicon metal as an input in the manufacture of polysilicon

which is used in the solar electricity industry.22

E. Pricing

46. Silicon metal is a commodity product for which price is an important, but not the only,

purchasing factor.23 Pricing for silicon metal sold in North America for the chemical and

aluminium industries is typically negotiated based on a pricing index as a starting point;

commonly used indices include Platts, Ryan's Notes, Metal Bulletin, and Metal Pages. The

index publications quote both "high" and "low" prices, creating for each index publication

a range of market pricing on any given day within a certain band.24

47. Metallurgical grade silicon prices are usually structured based on an index for standard

silicon (553), which is a grade used primarily by the secondary aluminium industry, while

primary foundry alloy producers require purer silicon with lower iron and calcium levels

(2202, 3303 and 441).25

48. Most foundry alloy producers have requirements contracts for volume, with either a fixed

price or a price floating based on a daily index. Additional charges or discounts for silicon

metal are negotiated based on volumes and the proximity to the index regional location


23 Tribunal Exhibit D-03: Public Witness Statement of Mark Pickett at para 25.24 Tribunal Exhibit D-03: Public Witness Statement of Mark Pickett at para 54.25 Tribunal Exhibit D-05: Public Witness Statement of Jean-Francois Laplante at para 8.

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(i.e. U.S. Midwest, CIF Rotterdam, CIF Main Japanese Ports and FOB China Ports). For

North America ("U.S. Midwest"), there is no pricing index published for the grades RTA

uses most frequently (2202 and 3303).26 A grade premium of around [

] is therefore added for grades 2202 and 3303 vis-a-vis the indexed price for grade 553

(i.e., grade 3303 is U.S. Midwest 553+[ ], and grade 2202 is U.S. Midwest 553+[

]). The price for grade 441 is [

].27

49. The United States, Canada, the EU and Australia have anti-dumping and/or countervailing

duties in place against silicon metal from China.28 In the case of the United States, these

duties have been in place since the early 90s.29 Trade flows of silicon metal are largely

driven by anti-dumping duties. Producers located in countries where there are no trade

remedies that cannot compete with Chinese material tend to be export-oriented. This will

not change as a result of the current ongoing proceedings in Canada and the U.S. [

].30

50. It should be noted that the U.S. Midwest market price is effectively established by

Ferroglobe; Globe Specialty Metals dominates the local price indices because it controls

26 Tribunal Exhibit D-03: Public Witness Statement of Mark Pickett at para 63; Tribunal Exhibit D-06: Protected Witness Statement of Jean-Francois Laplante, Protected Attachment 1, Silicon Use by Facility (2014-2017).

27 Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett at para 63.28 See Tribunal Exhibit A/B-10: Confidential statement of Evidence of Marlin Perkins, Confidential

Attachment 10, Updated Fact Base Slides re Silicon Metal Trade Flows in 2017.29 Tribunal Exhibit D-07: Public Attachment 4, Silicon Metal from China, Investigation No. 731-TA-472

(Fourth Review) (USITC), Final Results published in the Federal Register, Vol 82, No 126, Monday July 3, 2017.

30 As argued by the Complainants. See Tribunal Exhibit A/B-04: Confidential statement of Evidence of Andrew Hughes at para 15; Tribunal Exhibit A/B-02: Protected Case Brief of the Complainants at para 389.

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four of the six U.S. silicon metal producers, representing approximately [ ]% of U.S.

capacity and [ ]% of non-captive U.S. capacity.31

51. The cost of materials, utilities (i.e. electricity) and labour represent key input costs for

regular silicon metal. Where a silicon producer does not have vertical integration of its raw

material supply chain through established mining or logging rights, fluctuations in the

market price of quartz, coal and wood chips have a very significant impact on the cost of

silicon metal.32 Similarly, fluctuations in electricity prices can result in locations where

electricity is impacted by environmental conditions (e.g. water levels for hydroelectricity),

such as severely the case of Brazil in 2014 and 2015.33

52. In addition to the underlying production cost structure, the principal determinants of

longer-term silicon prices are the rate of underlying demand growth and the resulting

supply response. In the case of the markets that are characterized by trade restrictions, (i.e.,

Canada, the U.S., and the EU), prices are influenced by the timing and the size of changes

31 Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett at para 45(a); Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett, Confidential Attachment 3, CRU Silicon Metal Market Outlook Report (March 2017) at page 57 table 2.5.

WV Manufacturing LLC is a joint venture 51% owned by Globe and 49% owned by Dow CorningTribunal Exhibit D-04: Protected Witness Statement of Mark Pickett, Confidential Attachment 5: Globe Specialty Metals Locations; Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett, Confidential Attachment 3, CRU Silicon Metal Market Outlook Report (March 2017) at page 63, table 2.8.

32 Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett, Confidential Attachment 3, CRU Silicon Metal Market Outlook Report (March 2017).

33 Tribunal Exhibit D-07: Public Attachment 6, U.S. Energy Information Administration, "Hydropower supplies more than three-quarters of Brazil's electric power", https://www.eia.gov/todayinenergy/detail.php?id=16731; Tribunal Exhibit D-07: Public Attachment 7, Silicon Metal from Australia, Brazil, Kazakhstan, and Norway, U.S. ITC Investigation No. 701-TA-567-569 and 731-TA-1343-1345 (Preliminary) (May 1, 2017) at page 22: "During the POI, subject Brazilian producers faced disruptions in their production because of an energy crisis and electricity shortage in Brazil, and two Brazilian producers, LIASA and MINASLIGAS, ceased production temporarily."

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in production in these markets as well as by trade remedies that impact access to silicon

from foreign suppliers.

IV. THE CANADIAN SILICON METAL MARKET

A. Canadian Supply and Demand of Silicon Metal

53. The only Canadian producer of silicon metal is the complainant "QSLP", which is

ultimately jointly owned by (1) Ferroglobe Plc (51%), and (2) Dow Chemical Company

("Dow") (49%), the Canadian branch of a global silicon product and chemical producer

based in Midland, Michigan. QSLP has a theoretical production capacity of 47,000 MT.34

In 2016 it produced [ ] MT of silicon metal.35

54. Under its joint venture agreement, QSLP transfers approximately half of its production to

each of its joint venture partners every year at [ ].36 Over the POI

(which covers Q1 2014 through the end of Q1 2017), QSLP produced a total of

[ ] MT,37 which includes transfers to Dow.38 QSLP transferred ([ ] MT of silicon

metal to QSIP and [ ] MT to Dow.39 Dow transfers its volume to the United States for

34 Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett, Confidential Attachment 17: Globe Specialty Metals, "Quebec Silicon LP – Overview" (accessed September 10, 2017) http://www.glbsm.com/quebecsilicon/.

35 Tribunal Exhibit NQ-2017-001-07A: Vol 2.1, page 150: Protected Investigation Report Table 23.36 Tribunal Exhibit A/B-06: Protected Statement of Evidence of Maria Spensieri, at para 19.37 Tribunal Exhibit NQ-2017-001-07A: Vol 2.1, page 150: Protected Investigation Report Table 23. Latest

annual volume was [ ] mt in 2016.38 Tribunal Exhibit NQ-2017-001-07A: Vol 2.1, page 150 and page 165: Protected Investigation Report Table

23and Table 38. In 2016, [ ] mt was for domestic sales and [ ] mt was for export sales. Note thatthere is a difference [ ].

39 Tribunal Exhibit NQ-2017-001-07A: Vol 2.1, page 165: Protected Investigation Report Table 38; TribunalExhibit NQ-2017-001-12.01: Producer's Questionnaire PRO Vol. 4 page 9 Schedule 3. In 2016, [ ] mtof silicon metal was reported transferred to QSIP and [ ] mt to Dow. Note that the Quebec SiliconProducers' Questionnaire reports that [

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its own use in silicones manufacturing.40 Only the volumes transferred to QSIP are

available for sale on the merchant market domestically and for export sale by QSIP.

55. Of QSIP's [ ] MT of product it received from QSLP over the POI, it sold [ ] MT

] MT.41 This means that the Complainantof silicon metal in Canada and exported

sold % of its available volumes.42

56. There were [ ] MT of silicon metal purchased in Canada for domestic consumption

(domestic and imported) during the POI.43 Demand in Canada therefore outstripped

maximum available supply from domestic capacity over the POI by [ ] MT, or 55%.44

57. [ ] MT (approximately [ ]% of the overall market of silicon metal) was purchased by

RTA in 2016,45 and [ ] MT was purchased by Alcoa (approx. [ ]%).46 These two

companies are by far the largest consumers of silicon metal in Canada and collectively

account for a vast majority of Canadian consumption (approx. [ ]%).47 The remaining

domestic demand is made up of small operations with their own casting operations that

].40 Tribunal Exhibit A/B-05: Public Statement of Evidence of Maria Spensieri at para. 26.41 Tribunal Exhibit NQ-2017-001-07A: Vol 2.1, page 159: Protected revised Investigation Report Table 32;

Tribunal Exhibit NQ-2017-001-12.01: Vol 4, page 9-10: Protected Producer's Questionnaire, Schedule 3. In2016, QSIP sold [ ] mt in Canada and exported [ ] mt.

42 [ ]% in 2016.43 Tribunal Exhibit NQ-2017-001-07A: Vol 2.1, page 159: Protected revised Investigation Report Table 32.

Market Total - Volume [ ] mt in 2016.44 Shortfall was [ ] mt in 2016.45 Tribunal Exhibit NQ-2017-001-12.01: Vol 6.2 PRO, RTA Purchasers' Questionnaire at page 72.46 Tribunal Exhibit NQ-2017-001-12.01: Vol 6.2 PRO, Purchasers' Questionnaire at page 59 question C8.47 Tribunal Exhibit NQ-2017-001-07A: Vol 2.1, page 159: Protected revised Investigation Report Table 32,

Market Total - Volume.

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manufacture a variety of aluminum products, e.g. Real Alloy (approx. [ ]%), Rochester

Aluminum, Shawinigan Aluminum and other consumers (all [ ]).48

58. There were [ ] MT of imports into Canada over the POI, [ ]% of which were exported

from the subject countries.49 In 2016, RTA was the importer of record of nearly three

quarters of the imports into Canada of silicon metal ([ ] MT, or [ ]% of all

imports).50

B. Canadian and Global Demand Trends

1. Shift Toward Solar/Chemical Segments

59. RTA procures silicon metal in an environment of tenuous and inconsistent world supply,

which is experiencing a trend toward silicon production for solar applications within the

chemical sector (which saw an increase of 8 percentage points globally in its share of total

demand). Demand in the chemical sector for silicones also remains strong, particularly in

China.51 Demand for silicon metal in the aluminum sector is also growing, but more

moderately, and represents a declining percentage of the overall silicon metal market.52

48 Tribunal Exhibit NQ-2017-001-12.01: Vol 6.2 PRO, Purchasers' Questionnaires.49 Tribunal Exhibit NQ-2017-001-07A: Vol 2.1: Protected revised Investigation Report, at page 150 table 23.50 Tribunal Exhibit NQ-2017-001: Vol 6A, RTA Importer questionnaire at page 278.51 Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett, Confidential Attachment 3, CRU

Silicon Metal Market Outlook Report (March 2017) at page 18. 52 [ ]% to [ ]% from 2013 to 2016 see Figure 5 below. Tribunal Exhibit D-04: Protected Witness Statement of

Mark Pickett, Confidential Attachment 3, CRU Silicon Metal Market Outlook Report (March 2017) at page20: "[

]."

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60. Independent reports produced by CRU indicate that worldwide consumption of silicon

metal will rise from [ ] MT in 2016 to [ ] MT by 2018.53 This rise in demand

reflects a similar rise in consumption across most developed or developing nations, and

most notably in China where domestic consumption has been growing rapidly.54 The

expected growth continues a pattern of expanded silicon metal use by the chemical industry

(including solar) which accounts for 70% cumulative annual growth in silicon metal

demand.55 U.S. silicon metal demand is also expected to rebound in from a seven-year low

in 2016.56

Figure 3: World Silicon Metal Demand by End-Use Segment 2015-2021

[

]


54 Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett, Confidential Attachment 3, CRU Silicon Metal Market Outlook Report (March 2017) at pages 39-40.



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Figure 4: World Silicon Demand by End-Use Segment % Change Year-on-Year 2016-2021

[

]

Figure 5: Share of World Silicon Metal Demand by End-Use Segment 2013 vs 201757

[

]

57 Data source: Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett, Confidential Attachment 3, CRU Silicon Metal Market Outlook Report (March 2017). In the chart, "MCS" refers to the chemical industry/silicones ("mechylchlorosilane"), and "TCS" refers to the solar industry/polysilicon ("trichlorosilane").

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61. The silicon metal purchased by RTA is used to produce foundry alloy, which is further

processed by RTA's customers to produce wheels for vehicles and parts such as pistons,

suspensions, engine blocks, cylinder heads, intake manifolds for vehicles as well as other

parts for various transportation markets, including aerospace. As a result, market demand

in the automotive industry is the driver of demand by RTA and other primary foundry alloy

producers for silicon metal in Canada.

62. Silicon metal demand in the aluminum sector in North America has been increasing slowly

since 2013, supported by increased consumer demand for SUVs and pickups/light trucks

since more aluminium castings, sheet and extrusions are used in these types of vehicles

than in other models.58 However, demand for North American made foundry alloy,

specifically with respect to [ ], is expected to remain flat for the foreseeable

future in the face of rising foreign competition from foundry alloy manufacturers in Russia

and the Middle East.59

63. In the North American aluminum sector, demand has been shifting from T form foundry

alloy to small form ingot in part as a result of 'reshoring' of auto production by Asian

manufacturers with a preference for small form.60


59 Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett, Confidential Attachment 3, CRU Silicon Metal Market Outlook Report (March 2017) at page 24; Tribunal Exhibit D-06: Protected Witness Statement of Jean-Francois Laplante at para 38.

60 Tribunal Exhibit D-06: Protected Witness Statement of Jean-Francois Laplante at para 34.

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2. Captive Supply

64. The supply of silicon metals to chemical companies has, in Canada and on a global basis,

become increasingly vertically integrated in the past several years, with many major joint

ventures or acquisitions by chemical companies to ensure a reliable supply of silicon metal

feedstock. The result has been a shrinking supply of freely available silicon metal.61 World-

wide captive supply-base owned by chemical companies comprises close to 40% of the

total world silicon metal manufacturing capacity. This captive supply-base comprises

vertically integrated chemical companies such as Dow Corning Corp., China Bluestar

(which now owns Elkem), Wacker Chemical, OCI Specialty (which owns Elpion Silicon

in Malaysia), and Shin-Etsu International (which owns Simcoa Operations Pty in

Australia).62 UC Rusal is also vertically integrated in the aluminum sector.63

65. The non-captive supply capacity is therefore comprised of only a handful of companies:

Ferroglobe ([ ] ct),64 RIMA Industrial in Brazil ([ ] ct), Ligas do Aluminio "Liasa" in

Brazil ([ ] ct), Minasligas in Brazil ([ ] ct), Advanced Metallurgical Group (RW Silicium)

in Germany ([ ] ct), and Mississippi Silicon in the U.S. ([ ] ct),65 and Sica New Materials

(about [ ] ct at present).66 CRU reports that about [ ]% of silicon metal capacity is

61 Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett, Confidential Attachment 3, CRU Silicon Metal Market Outlook Report (March 2017) at pages 62-63.


63 Tribunal Exhibit D-07: PublicAttachment 8, Access Industries Holdings, "UC Rusal": https://www.accessindustries.com/holdings/uc-rusal/.



66 Tribunal Exhibit NQ-2017-001, Vol 6A PRO: Sica New Materials Foreign Producers Questionnaire at page 4.

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unavailable in a given year as a result of differences between effective and theoretical

capacities.67 A diagram of captive capacity is included as Confidential Attachment 3 to the

Statement of Evidence of Mark Pickett. RTA respectfully submits that the Tribunal should

examine the Complainant's claims of excess capacity very carefully in light of this evidence

regarding practical availability of supply.

3. Ferroglobe Dominance

66. Since the 2015 merger with FerroAtlántica, the Ferroglobe Group is by far the largest

silicon metal producer in the world outside of China, controlling [ ]% of the non-Chinese

production capacity and [ ]% of the volume produced outside of China in 2016.68

Ferroglobe owns four of the six U.S. silicon metal producers (representing approximately

[ ]% of U.S. capacity and [ ]% of non-captive U.S. capacity).69 Ferroglobe owns the only

silicon metal producers in South Africa, Argentina, Spain and France, and is reported to be

considering investments in Iceland.70

67. Ferroglobe has expressed a strategy of production and market allocation across its locations

worldwide. Ferroglobe's CEO, Pedro Larreda, has stated publicly that Ferroglobe centrally

coordinates the volume of product to be produced in each country and where it will be


68 Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett, Confidential Attachment 3, CRU Silicon Metal Market Outlook Report (March 2017) page 53 table 2.3.

69 Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett, Confidential Attachment 3, CRU Silicon Metal Market Outlook Report (March 2017) page 57 table 2.5; Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett at para 45(a).

70 See e.g. Tribunal Exhibit D-03: Public Witness Statement of Mark Pickett, Attachment 6: Patrick Ryan, "Is United Silicon a target of Ferroglobe?" In the Right Vein (September 1 2017), https://intherightvein.com/2017/09/01/is-united-silicon-a-target-of-ferroglobe/.

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shipped.71 This undermines the free will capabilities of the Complainant and other business

units of the Ferroglobe global empire to seek to maximize market opportunities that are not

in the interests of the Ferroglobe global strategy or other Ferroglobe business units.

C. Aluminum Industry Demand

68. The foundry alloy sector is very competitive and becoming increasingly so [

]. RTA competes for sales with Alcoa (U.S.), and [

], Alcoa Canada. [

]. RTA also competes with imported foundry alloy from

other countries such as Russia ([ ]) and the Middle East ([ ]),

which do not have anti-dumping duties in place in respect of silicon metal from China and

are therefore at a distinct advantage over RTA in procuring low-cost materials and

therefore pricing of aluminum alloy.72

D. RTA Procurement Process

69. The Rio Tinto global procurement model was established in April, 2009. Under its global

approach, all procurement has been and will be handled by RTPS. Procurement was

previously handled on a regional basis. Rio Tinto instituted [

71 Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett, Confidential Attachment 8: Ferroglobe PLC Q2 2017 Earnings Conference Call (30 August 2017), transcript available on NASDAQ: http://www.nasdaq.com/aspx/call-transcript.aspx?StoryId=4103015&Title=ferroglobe-s-gsm-ceo-pedro-larrea-on-q2-2017-results-earnings-call-transcript.

72 Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett at para 50; Tribunal Exhibit D-06: Protected Witness Statement of Jean-Francois Laplante at paras 38-39.

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].73

70. Since the 2013 finding in Silicon Metal I, RTPS has procured most of RTA's materials on

an agency model, whereby the suppliers [

].74 [

].75

71. RTPS sources silicon metal for Rio Tinto business units (including RTA) based on a

strategy that it refers to as "Total Cost of Ownership" ("TCO"). [

]. The key TCO drivers in

the silicon category are: [

]. A competitive market normally yields [

].76

72. Rio Tinto has a range of strict criteria that determines a supplier's qualification to supply

goods. This includes a [

73 Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett at para 13.74 Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett at para 17.75 Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett at para 17.76 Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett at para 28.

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]. The qualification

process for a new supplier takes [ ].77

E. Factors Influencing RTA Procurement Decisions

73. Principal factors that RTPS considers when sending out RFQs and responding to quotes

include the following: [

]. RTPS maintains a requirement with all of its

suppliers that RTA be allowed to [

].78

74. RTA takes a [ ] approach to the volumes of silicon metal it will procure at a given

time. [

].79

75. Demand for silicon metal by the aluminum sector derives directly from downstream

demand for foundry alloys.80 RTPS operates in a procurement environment that is

77 See RTA Purchaser's Questionnaire, Vol 6.2 PRO at page 73, question C14(b); Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett at para 30.

78 Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett at para 58.79 Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett at para 59.80 This is discussed in greater detail in Tribunal Exhibit D-05: Public Witness Statement of Jean-Francois

Laplante at para 45.

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disciplined by trade remedies and does not contemplate normal conditions of price

competition in respect of silicon metal. The Canadian producer has employed trade remedy

actions as an important business strategy to limit competitiveness generally and its

customers' abilities to source at competitive prices particularly.81

76. Faced with trade remedy based challenges, in 2014 RTPS introduced a bifurcated approach

to sourcing silicon metal that contemplated the purchase of a portion of RTA's needs from

the Canadian producer priced within the range of published U.S. Midwest pricing ([

]),82 and the balance from imports priced

based on [

]. RTPS achieves a sustainable overall silicon metal material cost by

[

].83

81 Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett, Confidential Attachment 8: Ferroglobe PLC Q2 2017 Earnings Conference Call (30 August 2017), transcript available on NASDAQ: http://www.nasdaq.com/aspx/call-transcript.aspx?StoryId=4103015&Title=ferroglobe-s-gsm-ceo-pedro-larrea-on-q2-2017-results-earnings-call-transcript at page 5; Tribunal Exhibit D-07, Public Attachment 5: Ferroglobe PLC - Form 20-F: Annual and Transition Report (Foreign Private Issuer) (May 1, 2017), http://files.shareholder.com/downloads/AMDA-5STP82/5165178030x0xS950157-17-524/1639877/filing.pdf at page 13; Tribunal Exhibit D-07, Public Attachment 9: Ferroglobe PLC - Form 20-F: Annual and Transition Report (Foreign Private Issuer) (May 2, 2016), http://files.shareholder.com/downloads/AMDA-5STP82/5165178030x0xS1193125-16-572914/1639877/filing.pdf at page 58; Tribunal Exhibit D-07, Public Attachment 21: Oppenheimer Stock Report: Ferroglobe PLC (August 31, 2017).

82 See table of negotiations in Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett at para 67.83 Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett at para 51.

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77. RTA's procurement strategy, including its approach to volumes purchased and prices RTA

is willing to pay, is therefore different for domestic and imported silicon metal. The two

streams of procurement complement each other and do not compete.84

V. LEGAL TEST

78. In conducting an inquiry under section 42 of Special Import Measures Act ("SIMA"),85 the

Tribunal must consider whether there is a causal link between the material injury suffered

by the domestic industry and the dumped imports.86 An injury finding is only permissible

if the dumping of goods is, "in and of itself", a cause of injury that is material. 87 Subsection

37.1(3) requires that the Tribunal separate and distinguish the adverse effects of the

dumping and subsidizing of goods from any adverse effects caused by other factors and

determine whether the impact of the former constitutes material injury.88 Where both

84 Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett at para 51.85 R.S.C., 1985, c. S-15.86 The relevant part of Article 3.5 of the Anti-dumping Agreement states in part: "The authorities shall also

examine any known factors other than the dumped imports which at the same time are injuring the domestic industry, and the injuries caused by these other factors must not be attributed to the dumped imports. Factors which may be relevant in this respect include, inter alia, the volume and prices of imports not sold at dumping prices, contraction in demand or changes in the patterns of consumption, trade restrictive practices of and competition between the foreign and domestic producers, developments in technology and the export performance and productivity of the domestic industry."

87 Oil Country Tubular Goods (Re), Inquiry No. NQ-2009-004 (December 29, 2009) (CITT) at paras. 207-216.

88 Other factors prescribed by subsection 37.1(3)(b) include: (i) the volumes and prices of imports of like goods that are not dumped or subsidized, (ii) a contraction in demand for the goods or like goods, (iii) any change in the pattern of consumption of the goods or like goods, (iv) trade-restrictive practices of, and competition between, foreign and domestic producers,(v) developments in technology, (vi) the export performance and productivity of the domestic industry in respect of like goods, and (vii) any other factors that are relevant in the circumstances.

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dumping and non-dumping factors contribute to injury, dumping need not be the "only or

the principal" cause of injury, but the injury from dumping must be material.89

79. In its case brief, the Complainant correctly cites the WTO panel decision in Japan – DRAM

for the principle that when assessing injury, the Tribunal must consider injury caused by

dumped or subsidized imports and not whether the margin of dumping or subsidization

caused injury. 90

80. While SIMA does not define the term "material", both the extent of injury during the

relevant time frame and the timing and duration of the injury are relevant considerations in

determining whether any injury caused by the subject goods is "material".91

81. RTA does not take an adverse position to the Tribunal's finding in the preliminary

determination regarding like goods, classes of goods, the constitution of the domestic

industry, or cumulation and cross-cumulation.92

VI. INJURY NOT CAUSED BY DUMPED OR SUBSIDIZED GOODS

A. Price of Imported Goods and Price of Domestic Goods Determined on Different Basis

82. The price of dumped or subsidized imports were not a cause of injury to the Complainant.

Conditions are such that imported goods and domestically sourced goods do not intersect

in the market at the same points of competition. From a strategic perspective, domestic and

89 Certain Refrigerators, Dishwashers and Dryers (January 16, 2002), CDC-U.S.C-2000-1904-04 (Bi-national Panel) at 14.

90 Tribunal Exhibit A/B-01, Public Case Brief of the Complainant, at para. 66; WTO Appellate Body Report, Japan – Countervailing Duties on Dynamic Random Access Memories from Korea, (WT/DS336/ABR) at para 264.

91 Hot-rolled Carbon Steel Plate (Re), [2014] CITT No. 64 at para. 183.

92 Silicon Metal, PI 2016-004 (11 May 2017) (CITT).

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imported silicon metal are treated as different procurement streams by RTA, Canada's

largest purchaser of silicon metal and are negotiated on different bases.93

1. Different Pricing Methodology

83. Starting in 2014, RTPS introduced [ ] model for silicon metal pricing

with certain foreign suppliers, some of which were qualified even before the 2013 China

finding.94 Under the [ ] model, [ ].

RTA's purchase price for silicon metal is determined [

].

84. In 2014-2016, RTA purchased [

]. In the case of these suppliers, [

].95

93 Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett at para 51.94 [ ].

Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett at footnote 54.95 Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett at para 75; Tribunal Exhibit D-04:

Protected Witness Statement of Mark Pickett, Confidential Attachment 15, Sample RTPS Pricing Schedules in Contracts.

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Given [ ], pricing of imports is [

].96

85. The [ ] pricing on the volumes purchased from these suppliers does not impact the

prices at which RTA negotiates with QSIP because [

].97

2. No Price Suppression

86. Given the trade remedy circumstances and lessons learned from the 2013 CITT decision,

RTPS does not engage in price negotiations with the Canadian producer based on import

prices. Rather, since 2013 these negotiations have been disciplined and consistently based

on [ ]. Therefore, prices achieved by the Complainant are

not undermined by alleged dumped/subsidized imports into Canada.

87. The market intelligence reference that RTPS uses when negotiating with the Complainant

is [

].98 Market forecasts regarding regional

96 Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett at para 76.97 Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett, Confidential Attachment 15, Sample

RTPS Pricing Schedules in Contracts.98 Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett, Confidential Attachment 7, RTPS

Procurement Negotiation Reference Document.

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pricing, demand and supply trends over the next six months also factor into RTPS' overall

sourcing strategy.

88. U.S. Midwest pricing is derived not from conditions of competition in Canada (particularly

from imports into Canada) but rather from supply/demand and attendant pricing conditions

in the U.S. market. The U.S. Midwest price indices are informed by Globe's U.S. pricing,

the pricing of Mississippi Silicon (a new entrant to the U.S. silicon metal market, discussed

below), and import pricing into the United States, and not by the prices of imports into

Canada.

89. U.S. Midwest pricing declined significantly during the portion of the period of review that

coincides with the injury suffered by the Complainant.99 Prices negotiated with QSIP by

RTPS therefore [

]. Coincidentally, Canadian import prices [

],100 but again these prices were not benchmarked by RTPS in its negotiations with

the Canadian producer. [

].101

99 Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett, Confidential Attachment 12, U.S. Midwest Index Pricing for Grade 553 (delivered) 2014-H1 2017.

100 Tribunal Exhibit NQ-2017-07A: Vol 2.1: Protected revised Investigation Report, at page 172 Table 45.101 Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett at para 62.

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Figure 6: RTA's Average Silicon Metal Purchase Prices by Quarter – QSIP vs Rest of World Jan 2014-Aug 2017102

QSIP Wgt. Avg. Price in U.S.D

([ ])

ROW Wgt. Avg. Price in U.S.D

([ ])

ROW Wgt. Avg Price in U.S.D

([ ])

[ ]

U.S.D Avg. Exchange

Est. [ ] in U.S.D

2014Qtr1 [ ] [ ] [ ] [ ] [ ]Qtr2 [ ] [ ] [ ] [ ] [ ]Qtr3 [ ] [ ] [ ] [ ] [ ]Qtr4 [ ] [ ] [ ] [ ] [ ]

2015Qtr1 [ ] [ ] [ ] [ ] [ ]Qtr2 [ ] [ ] [ ] [ ] [ ]Qtr3 [ ] [ ] [ ] [ ] [ ]Qtr4 [ ] [ ] [ ] [ ] [ ]

2016Qtr1 [ ] [ ] [ ] [ ] [ ]Qtr2 [ ] [ ] [ ] [ ] [ ]Qtr3 [ ] [ ] [ ] [ ] [ ]Qtr4 [ ] [ ] [ ] [ ] [ ]

2017Qtr1 [ ] [ ] [ ] [ ] [ ]Qtr2 [ ] [ ] [ ] [ ] [ ]Qtr3 (to Aug) [ ] [ ] [ ] [ ] [ ]

90. U.S. Midwest market prices have formed the basis of price quotation by QSLP. [

]. The allegation by Mr. Marlin Perkins that the Ryan's Notes index price is

based on silicon metal for sales into the secondary foundry alloy sector and is therefore not

comparable to sales by QSIP to RTA is unfounded.103 The Ryan's Notes index price is

reported for grade 553, which is the most common grade used in secondary aluminum

production. Understanding this and based on experience dealing with QSIP procurement,

RTPS adjusts for this difference by adding an amount of [

102 Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett, at para 62, Figure 7.103 Tribunal Exhibit A/B-09: Public Statement of Evidence of Marlin Perkins at para 8.

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] to the 553 U.S. Midwest index prices to appropriately estimate what pricing

should be for purer grades. The market indices are an accurate and reliable reflection of a

range of prices, and hence average selling prices at a given moment in time.

91. It is also important to note that Ferroglobe, with its majority of the merchant market for

silicon metal in North America, effectively determines the average U.S. Midwest prices as

reported in the indices.104 These U.S. Midwest prices are delivered prices, and the [

].105

92. The pricing negotiated by RTPS with the Canadian producer therefore depends not on the

subject imports into Canada as claimed, but rather on the pricing of silicon metal in the

United States, which is in turn dependent on the sale of silicon metal there from domestic

and imported sources.

3. Lost Sale Allegations

93. In its evidence, the Complainant alleges three instances of negotiations with RTA in which

the prices and/or volumes of subject goods had an injurious effect on the Complainant's

performance. The causal connection alleged by the Complainant is conclusory and is not

based on cogent or probative evidence. Available prices and/or volumes of subject goods

from foreign suppliers had no impact on RTPS' negotiating strategy or purchasing

104 Tribunal Exhibit D-03: Public Witness Statement of Mark Pickett at para 57.105 Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett at para 60.

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decisions in the three alleged instances, nor did they in any other negotiation between RTPS

and QSIP over the POI.

94. RTPS had records of [ ] price negotiations that took place during the POI. In all cases

where QSIP quoted [ ], RTPS

accepted the Complainant's quotation without negotiation and without citing subject import

prices.106 In the cases that RTPS pushed back and asked for a lower quotation from QSIP,

it was always in reference to [

]. A summary table of

the negotiations is as follows.107 Note that all prices are denominated in U.S. dollars:

Ref. No.

Date of RFQ

Volume and Grade

U.S. Midwest price band (low and high)108

Initial Quote from QSIP (U.S. dollars)

Final Price Accepted by RTPS (U.S. dollars)

1. [

]

[ ]

[ ] [

]

[

]

106 Tribunal Exhibit D-03: Public Witness Statement of Mark Pickett at para 66.107 Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett at para 67.108 Low and High U.S. index prices in month of RFQ, from [

]. See Tribunal Exhibit D-04: ProtectedWitness Statement of Mark Pickett, Confidential Attachment 7, RTPS Procurement Negotiation Reference Document.

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2. [

]

[

]

[ ] [

]

Blended average price of [ ] for grade 3303, [ ] of grade 2202 (for [ ] MT total)

In this sale, RTPS invited QSIP to quote on a [ ] basis. The [ ] QSIP quoted was [

]. RTPS then requested a fixed quote from QSIP, which it ultimately accepted.

3. [ ] [ ]

[ ] [ ] [ ] – Accepted price without negotiation.

4. [ ] [ ]


5. [ ] [ ]


6. [

]

[ ]

[ ] [ ] [ ] – Accepted price without negotiation. RTA paid a [ ]premium over lowest market price for 3303.

7. [ ] [ ]

[ ] [ ] [ ] – QSIP was quoting [ ] above the highest U.S. market price ([ ]above highest market price for 3303); RTA ended up paying a premium of [ ] over the lowest market price for 3303.

8. [ ] []

[ ] [ ] [ ] – RTA paid a [ ] premium over lowest market price for 3303.

9. [ ] [ ]

[ ] [ ] [ ] – RTA paid a [ ] premium over the lowest U.S. market price for 3303. [ ].

10. [ ]

[ ]

[ ] [ ]

[ ] – RTA paid a [ ]premiumover the lowest market price for 3303.

11. []

[]


12. [ ] []


95. As described in the table above, the behavior of RTPS with respect to price negotiations

has been consistent across the entire POI. Notably, the Complainant only alleges injury in

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connection with four of these negotiations: [

]. In all of the alleged instances,

RTA paid a price that was [

].109 The fact that RTA asked for QSIP to reduce

its price is not in itself evidence of anything other than the fact that RTA is a rational and

sophisticated consumer. It is perfectly reasonable for RTA to try to obtain a lower price

when [

].

96. RTA notes that in a number of instances during the POI, QSIP led with a price quotation

that was lower than U.S. market pricing during that period ([

]), which RTA accepted without negotiation. However, [

].

97. RTA submits that given the [ ] nature of price negotiations for silicon metal

between QSIP and RTPS, the above table and the specific negotiation examples posed by

the Complainant are more highly relevant and probative than the Tribunal's Investigation

report tables and commentary on the issue of whether or not price suppression or erosion

was caused by subject imports. If the Tribunal were to draw conclusions based on abstract

109 Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett, Confidential Attachment 7, RTPS Procurement Negotiation Reference Document.

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numbers without considering the underlying facts and details of the negotiations, this

would result in an incomplete and skewed analysis.

4. Import Volumes of Dumped and/or Subsidized Goods Were Coincidental and Have No Causal Link to Injury

98. The relative volumes of Canadian produced silicon metal and imported silicon metal

purchased for RTA vary depending on the need to [ ] silicon metal

used in production of aluminum alloys for the automotive industry that is sold and exported

predominantly to the United States and Mexico. [ ] allows RTA to produce

and sell aluminum alloys at a margin over production of melt, contributing to profitability.

Failing to earn a margin impinges on RTA's aluminum alloy market participation.110

99. The relative volumes purchased and delivered also vary based on a number of other non-

price and non-import factors including [

].111 For RTA, it has not

been, and is not in the future likely to be, a question of whether to [

], the whole in accordance with its "Total Cost of

Ownership" strategy. RTPS' consideration when negotiating with the Complainant is

[

110 Tribunal Exhibit D-06: Protected Witness Statement of Jean-Francois Laplante at paras 28-30, 45.111 Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett at para 58.

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].112

100. For these reasons, there is no causal link between dumped/subsidized pricing of imports

and price erosion or lost sales volume suffered, or likely to be suffered in the future, by the

Complainant as a result of RTPS/RTA actions, and the basis of the claim by the

Complainant fails.

1. Timing of Purchases

101. RTPS [ ] the timing of purchases. When procuring silicon metal

from suppliers with which RTA does not have long-term supply agreements, RTPS makes

strategic purchasing decisions [ ].

Like any rational procurement entity, RTPS [

].113

102. A "map" of RTA's purchasing negotiations is included as Confidential Attachment 12 to

the Statement of Evidence of Mark Pickett. The map illustrates how [

]. The chart also

112 Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett at para 69.113 Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett at para 78.

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shows that RTPS [ ] from QSIP throughout the POI and [

].114 However, [ ], and as discussed in

the Statement of Evidence of Mark Pickett, the other significant import sources from which

RTA purchased [ ].

The map also shows that the volumes acquired from the various suppliers were procured

[ ] – RTPS' procurement schedule does not pit volumes from QSIP

directly against volumes from imports.

2. Apparent Market Share

103. The Complainants allege that imports from the subject countries entered Canada at a

"staggering" rate from 2014-2016. This is a simplistic, hyperbolic and exaggerated

mischaracterization of the data.

104. First, what actually took place in 2014-2016 was not an increase in imported goods, but a

readjustment of a market that was severely disrupted in 2013 as a result of the finding the

Silicon Metal I. QSIP-produced silicon metal was extremely sparingly available for

purchase in Canada prior to 2014, and Canadian consumers of silicon metal had deeply

entrenched supply chains involving Chinese producers. It is natural that imports from

silicon-producing countries other than China (of which the subject countries represent the

substantial majority) increased from 2014-2016 as RTA and other purchasers reconfigured

their supply chains to qualify alternative suppliers when Chinese product became cost

114 Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett at para 83.

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prohibitive. As noted in section IV above, the Complainant did not and does not have the

capacity to supply the entire Canadian market demand for silicon metal.

105. Second, the Complainants' Table 2 that purports to show a "staggering" increase in imports

ignores both data from 2014 and ignores imports from non-subject countries. If the table is

extended, the Tribunal will observe that total import volumes had a net increase of [ ]%

from 2014 to 2016, QSIP's net sales also [ ]% over the same period, and the

overall market grew [ ]%.

Figure 7: Data from Investigation Report Table 32 – Market Total – Volume

Country 2014 2015 2016 % change 2014-2016

Brazil [ ] [ ] [ ] [ ]

Kazakhstan [ ] [ ] [ ] [ ]

Laos [ ] [ ] [ ] [ ]

Malaysia [ ] [ ] [ ] [ ]

Norway [ ] [ ] [ ] [ ]

Thailand [ ] [ ] [ ] [ ]

All Subject Countries [ ] [ ] [ ] [ ]

Non-Subject Countries [ ] [ ] [ ] [ ]

All imports: [ ] [ ] [ ] [ ]

QSIP Sales [ ] [ ] [ ] [ ]

TOTAL MARKET [ ] [ ] [ ] [ ]

106. QSIP also enjoyed a [ ] in overall market share of [ ]% from 2014 to 2016 while

import market share [ ] by a corresponding [ ]%:

Figure 8: Data from Investigation Report Table 36 – Market Volume – Percent Share

Country 2014 2015 2016% change 2014-2016

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Brazil [ ] [ ] [ ] [ ]

Kazakhstan [ ] [ ] [ ] [ ]

Laos [ ] [ ] [ ] [ ]

Malaysia [ ] [ ] [ ] [ ]

Norway [ ] [ ] [ ] [ ]

Thailand [ ] [ ] [ ] [ ]

Non-Subject Countries [ ] [ ] [ ] [ ]

All imports: [ ] [ ] [ ] [ ]

QSIP [ ] [ ] [ ] [ ]

107. The fact that relative market shares between QSIP and imported goods [

] during the POI suggests that 2015 was an anomaly, rather than a reasonable basis for

comparison. An explanation for this anomaly is found in RTA's evidence: The reason why

QSIP was more successful in domestic volumes sold in 2015 than during the rest of the

POI was the result of [

].115 QSIP was presumably able to [

] in 2015 because market prices at that time were exceptionally high.

QSIP's share of the domestic market sales was the same in 2016 as it was in 2014, and the

Complainant does not allege that it suffered injury in 2014. All other things being equal,

the Complainant suffered injury when U.S. Midwest market prices tanked and it could no

longer sell the same volume of its goods at the high price that it was previously able to

fetch in previous periods, 2014 and 2015, during which it claims not to have suffered

115 Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett, Confidential Attachment 13, Quote #2.

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injury.116 This injury is entirely unrelated to the volumes of imports of subject goods into

Canada.

108. The overall volume of imports has not changed during the period of review. The

Complainants argument that the mere presence of available volumes from subject

countries, as opposed to volumes available from all other sources of imports, was a cause

of injury does not make any logical sense. The Tribunal cannot make a finding of injury

based on the mere presence of subject imports in Canada without evidence that establishes

a causal connection between the subject imports and the injury suffered by the

Complainant.117

3. Individual Examination of Volume Procurements

109. Rather than assuming "trends" based on an abstracted review of data over a very small and

turbulent period of time, RTA's purchases must be examined individually in context. The

Tribunal cannot draw conclusions as to whether QSIP is "gaining" or "losing" market share

by looking at aggregate purchase volumes because there is no baseline volume of sales by

QSIP in Canada that is "normal" and traditional calendar and part-calendar year

comparisons are meaningless given RTA's approach to procurement as discussed above

and elaborated below.

110. For example, in the first quarter of 2014, RTA purchased [

116 Tribunal Exhibit A/B-01: Public Case Brief of the Complainant, at para 80. In both 2014 and 2015, average U.S. Midwest market prices were well over [ ], and reached nearly [ ] at the end of 2014. See Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett, Confidential Attachment 8.

117 See e.g. Silicon Metal, Inquiry No. NQ-2013-003 (4 December 2013) (CITT) at para 109; Copper Rod,Inquiry No. NQ-2006-003 (12 April 2007) (CITT) at para 83.

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].118 But this is not indicative of

"normal" behavior for RTPS. Before and during the Silicon Metal I proceedings, [

].119 It would not be reasonable to assume that the

proportion of the volume that the Complainant won in this one-time purchase is indicative

of "market share" with respect to RTA's purchasing patterns over the long run.

111. Similarly and as discussed above at paragraphs, QSIP's volumes sold to RTA were [

] in 2015 due to [

].120 The

Complainants'

118 See Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett, Confidential Attachment 16, RTA Negotiations Timeline "Map" 2014-2017.

119 Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett at para 86.120 Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett, Confidential Attachment 9, Quote #2;

Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett, Confidential Attachment 16, RTA Negotiations Timeline "Map" 2014-2017.

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allegation that their volumes sold to RTA declined in 2016 is therefore erroneous because

it references an invalid point of comparison.121

112. In 2016, [ ]

but the [ ] reflected RTA's volume commitment to [ ]. RTA

decided to undertake a [

]. The volumes awarded to [ ] were part of a

longer-term, strategic commitment to [ ]

and broaden its basis of supply. The volumes were not "zero sum" in the sense that the

additional volume [ ] caused a loss in volumes awarded to QSIP in 2016,

because QSIP's volumes were procured and negotiated entirely separately and based on

other factors.122

4. Factors Other than Price That Drive Procurement Decisions

113. Silicon metal is a commodity product that is essentially fungible. As indicated in RTA's

questionnaire response, while price is an important factor for RTA when procuring silicon

metal,123 the Complainant's assertion that it is the "primary" factor is false.124

114. Table 6 of the Investigation Report reviews the factors that responding purchasers indicated

in their questionnaires were important to their purchasing decisions. 100% of the

responding purchasers indicated that product quality, product consistency, and the fact that

121 Tribunal Exhibit AB-02: Confidential Case Brief of the Complainant, at para 156.122 Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett at para 88.123 Tribunal Exhibit NQ-2017-001-20.09: Vol 5.2, page 198, "Purchaser's Questionnaire on Market

Characteristics - RTA".124 Tribunal Exhibit A/B-01: Public Case Brief of the Complainant, at para 43.

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the product meets technical specifications were all identified as a "very important" factor.

Eight out of nine purchasers also identified reliability of supply as "very important", and 6

identified delivery time and terms as "very important". In contrast, only 3 out of 9

purchasers indicated that lowest net price was a "very important" factor (the majority of

respondents identified lowest net price as a "somewhat important" factor).125

115. In response to the question "how frequently does the lowest-priced goods win the contract

or sale", respondents were mixed, with three each replying "usually", "sometimes", and

"never". No purchasers responded with "always".126 This is remarkable given the

fungibility of silicon metal. It attests to factors other than price competition weighing

heavily as explained by RTA's procurement strategy.

116. The two most important purchasers of silicon metal, RTA and Alcoa, both answered "not

applicable; would never switch all purchases to only imported goods" in response to the

question "what percentage of price decrease would result in your firm deciding to satisfy

100 percent of its silicon metal requirements with product originating in that country".127

117. Principal factors that RTPS considers in its procurement decisions include [

125 Tribunal Exhibit NQ-2017-001-06A Public: Public Revised Investigation Report, Vol 1.1 page 22, Table 6. 126 Tribunal Exhibit NQ-2017-001-06A Public: Public Revised Investigation Report, Vol 1.1 page 29 Table

19.127 Tribunal Exhibit NQ-2017-001-20.07 Public: Alcoa Canada Co. reply, Vol 5.2 at page 144; Tribunal

Exhibit NQ-2017-001-20.09 Public: RTA reply, Vol 5.2 at page 193.

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].128

118. RTA has [

]. However, this behavior will not be sustainable in the longer run if

final duties are imposed in an amount that makes purchasing from these suppliers

prohibitive. [

].129

5. Factors Other than The Imports of Dumped or Subsidized Goods into Canada that Caused Injury

6. U.S. Price Depression

119. The price reductions that the Complainant suffered during the POI were due to depression

in the U.S. market prices for silicon metal, [

]:

128 Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett at para 58.129 Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett at para 88.

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Figure 9: Average U.S. Midwest Silicon Metal Index Prices for Grade 553 2014-2017130

[

]

120. U.S. Market Prices are impacted by a number of macroeconomic factors that are unrelated

to the dumped or subsidized goods being imported into Canada:

(a) Intra-industry Competition in the U.S.

121. In September 2015, a new entrant to the U.S. silicon metal market, Mississippi Silicon,

opened a new production facility in Mississippi which now represents nearly 10% of U.S.

production.131 Mississippi Silicon was the first new U.S. silicon metal producer in more

than 40 years and has a capacity of 36,000 mt/year.132

130 Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett, Confidential Attachment 8.131 Tribunal Exhibit A/B-03: Public Witness Statement of Andrew Hughes at para 18; Tribunal Exhibit D-07:

Public Attachment 10, “Silicon Metal Plant Debuts in U.S." (May 2016) Insight – 2016 Global Metal Trends, S&P Global Platts at 31.

132 Tribunal Exhibit D-07: Public Attachment 10, “Silicon Metal Plant Debuts in U.S." (May 2016) Insight – 2016 Global Metal Trends, S&P Global Platts at 31.

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122. Intra-industry competition between GSM and Mississippi Silicon in 2016 was aggressive.

Ferroglobe reacted strongly to the entrance of Mississippi Silicon, even resorting to

litigation tactics in an attempt to delay or block the construction the Mississippi Silicon

plant.133 In the ongoing trade remedy inquiry at the U.S. International Trade Commission

regarding silicon metal, several industry witnesses testified before the ITC that the entry of

Mississippi Silicon impacted their buying patterns and prices during the POI.134 There was

evidence submitted that as Mississippi Silicon sought to gain market share, U.S. prices for

both domestic sales and imports dropped both due to increased competition and other

market forces.135 Another industry witness testified that uncertainty surrounding the

combination of GSM and FerroAtlantica also contributed to falling prices in the second

half of 2015 and the first three quarters of 2016.136

123. The relative contributions to price erosion and stabilization in the United States, and

therefore in the U.S. Midwest price indices, have nothing to do with subject good imports

into Canada. Price movements in the United States relate to the supply/demand balance in

133 Tribunal Exhibit D-07: Public Attachment 11: Globe Metallurgical, Inc. v. MS ENVTL. 192 So. 3d 1084 – Miss. Court of Appeals 2016 (May 17, 2016). In March 2014, GSM incorporated a subsidiary, purchased a small house near the MS facility site, and filed a lawsuit challenging an environmental permit issued to MS. The case was dismissed as meritless, as was GSM's appeal. See also Tribunal Exhibit D-07: Public Attachment 10, “Silicon Metal Plant Debuts in U.S." (May 2016) Insight – 2016 Global Metal Trends, S&P Global Platts at 31.

134 Tribunal Exhibit D-07: Public Attachment 12, Case Brief of the Joint respondents at 2, 32. The Joint Respondents submitted that MS entered the market and built its initial market share by aggressively pricing its products, which had a downwards impact on U.S. prices of silicon metal.

135 For instance, in an expert report filed by the Joint Respondents, Dr. Kivanc Kirgiz points out that the effects of increased competition were exacerbated by declining electricity costs in the U.S. which led to lower operating costs for U.S. silicon metal producers and, and therefore lower silicon metal prices. See Tribunal Exhibit D-07: Public Attachment 12, Case Brief of the Joint respondents at 32; Tribunal Exhibit D-07: Public Attachment 13, Exhibit 4 of the Joint Respondents' Case Brief, Expert Report of Dr. Kirgiz at 2.

136 Tribunal Exhibit D-07: Public Attachment 14, Declaration of Tom Walters, Exhibit 6 to the Case Brief of the Joint Respondents.

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that country and the prices offered by domestic and import supply sources, including

Ferroglobe, Mississippi Silicon, and subject and non-subject imports into the United States.

There is no causal connection between prices of subject imports into Canada and US price

indices, and therefore between prices of subject imports and price quotations by the

Complainant.

124. The U.S. Midwest price dropped in 2015 but began to recover in 2016. One factor was that

Mississippi Silicon 's capacity was absorbed into the market. The U.S. domestic industry

benefitted from high prices in 2014 and the first half of 2015. Though prices fell in 2016

due to a number of factors, they are now recovering and are forecast to continue to improve

into 2021.137

(b) Falling Prices of Raw Materials (Coal and Electrodes)

125. Global market prices for coal and carbon electrodes, key raw material inputs in the

manufacture of silicon metal, have been declining since 2012. This contributed to reduced

production costs that materialized as a reduction in market prices for silicon metal in both

the U.S. and Canada.138

137 Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett, Confidential Attachment 3, CRU Silicon Metal Market Outlook Report (March 2017) page 87 & 93.

138 Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett, Confidential Attachment 18, CRU Cost Data Service Report (May 2017).

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Figure 10: Chart from CRU re falling Coal and Electrode Prices139

[

]

7. USD Exchange Rate Fluctuations

126. Injury is also partially explained by the movement of exchange rates and the consequent

impact on production costs for silicon metal producers located outside the U.S. The

standard currency for trading silicon metal internationally is the U.S. dollar. Starting in

2015, the U.S. dollar began to appreciate significantly in relation to the local currencies of

a number of the subject countries in this case as well as in the ongoing U.S. dumping and

subsidy investigations.140

139 Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett, Confidential Attachment 18, CRU Cost Data Service Report (May 2017) at page 2.

140 Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett, Confidential Attachment 3, CRU Silicon Metal Market Outlook Report (March 2017) at page 82, box 4 and 5.

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127. In the past, costs incurred in U.S. dollars have forced prices in U.S. dollars upward in the

U.S., and to some extent in Canada. The U.S. Midwest price was relatively higher as a

result, and prices in 2014/15 and early 2016 reflected this buoyancy. In contrast, the U.S.

dollar depreciated in the latter part of 2016 and into 2017, which caused costs and attendant

prices to fall in foreign dollar terms during the period during which injury is claimed. This

led to increased price competition in the U.S. and Canada.

128. The currency factor, when added to the supply price competition factor, explain the erosion

of the U.S. Midwest price and therefore pricing achieved in Canada by the Complainant

negotiating in and around the U.S. Midwest price. The downward pressure on prices by

supply price competition factors in the U.S. worked against a backdrop of rising costs in

U.S. dollar terms, with the result that margins were squeezed in the U.S. The same applies

to the Complainant to the extent it incurs U.S. dollar denominated costs (for example, for

coal, which the Complainant sources from a related party in the United States).141

141 Tribunal Exhibit D-07: Public Attachment 15, Globe Specialty Metals Inc., Form 10-K (Annual Report), Filed August 27, 2015 for the period ending June 30, 2015, at page 13. Globe stated: "We control the supply of most of our raw materials. […] Alden Resources provides a stable and long-term supply of low ash metallurgical grade coal supplying a substantial portion of our requirements to our operations in the U.S., Canada and South Africa."

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Figure 11: Value of Subject Country Currencies versus U.S. Dollar 2014-2017

[

]

8. Security of Supply Imperative

129. As discussed above, diversification of supply is a key facet of RTA's "Total Cost of

Ownership" procurement strategy.142 RTA and Alcoa have both stated that they would

never switch all purchases to only imported goods.143 The fact that these customers value

supply diversification means that there will always be restrictions on the amount of market

share that QSIP can hold.

142 Tribunal Exhibit D-03: Public Witness Statement of Mark Pickett at paras 25-30.143 Tribunal Exhibit NQ-2017-001-20.07 Public: Alcoa Canada Co. reply, Vol 5.2 at page 144; Tribunal

Exhibit NQ-2017-001-20.09 Public: RTA reply, Vol 5.2 at page 193.

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9. Demand for Silicon Metal Based on Demand for Canadian Aluminum Alloy Exports

130. Lower demand for North American-produced foundry alloys is another factor unrelated to

the subject imports that contributed to the injury suffered by Aluminum alloy market

conditions in the United States and Mexico are instrumental to RTA being able to achieve

successful export sales and to maintaining or increasing its demand for silicon metal used

in RTA's production.144 In recent years, total demand for aluminum alloys has increased,

[ ] as a result of lower silicon metal

prices than can be obtained by its Russian and Middle East competitors from China; in both

cases the costs of silicon metal are not inflated by trade remedy duties and enable lower

aluminum alloy price offerings.

131. In addition to price competitiveness, Russian/UAE producers of aluminum alloy have

gained traction in market acceptance of their aluminum alloys. Whereas previously U.S.

and Mexican purchasers reserved a significant portion of their sourcing needs to North

American supply (including RTA) due to wariness as to quality and other indicia of

reliability, that reserve is declining at a rapid rate, with the result that [

].145

132. The significance of RTA's competitive position in the context of the injury proceedings is

that it impacts demand for domestically produced silicon metal, and more particularly

144 Tribunal Exhibit D-05: Public Witness Statement of Jean-Francois Laplante at paras 42-45.145 Tribunal Exhibit D-05: Public Witness Statement of Jean-Francois Laplante at para 40.

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domestically produced silicon metal priced at U.S. Midwest levels. This is, per se, not a

"public interest" argument.146

133. At this juncture, it is anticipated that fewer, if any, pass-throughs of silicon metal price

increases will be accepted by U.S. and Mexican customers. And while aluminum alloy

automotive demand is increasing in the United States and Mexico due to an increase in

small form usage, [[_______________________________________________________

]. This decline in demand

will have a negative effect on the Complainant, purchases from which are maintained in

146 RTA recognizes that downstream market conditions were dismissed by the Tribunal in Silicon Metal I and as a public interest issue. However, public interest considerations are not what RTA is arguing by offering this evidence. Rather, RTA offers this evidence because it is relevant to the Tribunal's consideration of demand factors unrelated to the dumped or subsidized goods in the injury and threat of injury analysis.

It is well-settled law that administrative tribunals are not bound by their previous decisions, and that the principle of stare decisis does not apply to administrative tribunal decisions. See Canada (Attorney General) v. Bri-Chem Supply Ltd., 2016 FCA 257; I.D. Foods Superior Corpage v. Deputy Minister of National Revenue, Appeal No. AP-95-252, December 12, 1996. Accordingly, this Tribunal is not limited in its consideration of evidence related to RTA's competitive position in the injury proceedings as an economic factor related to demand for silicon metal.

While issue estoppel may preclude re-litigation by the same parties which have been finally determined in a previous decision, it does not apply in the case at hand. The required elements of issue estoppel are: (1) the same question is being decided; (2) the judicial decisions which is said to create the estoppel must be final; and (3) the parties to the judicial decision on their privies must be the same persons as the parties to the proceedings in which the estoppel is raised or their privies. Cherry Stix Ltd. v. Canada Border Services Agency, 2010 CanLII 38689 (CA CITT) (citing Canada (Minister of Employment and Immigration) v. Chung [1993] 2 FC 42. The current proceeding involves new respondents that were not party in the Silicon Metal I proceedings. Specifically, while the complainants are the same as in Silicon Metal I, the respondents in the present inquiry include numerous new parties, namely the government of Brazil, the government of Kazakhstan, the government of Norway, the government of Russia and the government of the Kingdom of Thailand, Rio Tinto Alcan Inc., SICA New Materials Co., Ltd., SICA New Materials (Thailand) Co., Ltd., Elkem AS, Wacker Chemicals Norway AS, Wacker Chemie AG, Ligas de Aluinio S/A (LIASA), Companhia Ferroligas Minas Gerais, United Company RU.S.AL PLc, Quebec Silicon Limited Partnership, QSIP Canada ULC, RIMSA Industrial S/A, Polymet Alloys Inc., Alcoa Canada Co., Dow Corning Corporation, Cow Corning Canada Inc.

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part due to RTPS' ability to average cost silicon metal inventory through access to imports

at lower prices.147

10. Self-Injury

134. To the extent that the Complainant is suffering material injury, its cause is and will continue

to also be self-made.

(a) Ferroglobe Global Sales Strategy and Export Performance

135. The Complainant represents a small proportion of total multinational production by its

ultimate owners, Ferroglobe. Ferroglobe controls the markets to which each of its business

units may sell.148 The Complainant has publicly declared its focus on Canada.149 There are

only two significant customers in Canada, and they are both in the aluminum alloy business

only. The Complainant has not sold, and does not have plans to sell, to the chemical or

solar application markets in the U.S. or elsewhere.

136. This means that the Complainant has little leverage, other than trade remedies, in

negotiations given it has only two significant customers. Having only two major customers

has an obvious negative silicon supply side effect on pricing, independent of other sources

of silicon metal, because the Canadian supplier cannot trade off supplying to other

(alternate) customers to exact higher prices in its negotiations. The Complainant is

similarly disadvantaged by being limited in that it likely cannot export to markets where

147 Tribunal Exhibit D-06: Protected Witness Statement of Jean-Francois Laplante at paras 24, 33-34, 40.148 Tribunal Exhibit D-07: Protected Attachment 3, Ferroglobe PLC Q2 2017 Earnings Conference Call (30

August 2017). 149 Tribunal Exhibit A/B-02: Confidential Case Brief of the Complainant, at para 97.

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other Ferroglobe business units already have coverage, again limiting the number of

customers and its leverage in negotiations independent of other sources of silicon metal.

137. And finally, this means that the Complainant is limited to producing for only one of the

silicon metal end uses, and while the market for aluminum alloys is growing, the other

markets, solar and chemical, are extremely important and represent a collectively larger,

faster growing, and more lucrative share of total demand. The Canadian producer is

restricted from participating in these markets. All three results point to self-imposed injury

unrelated to the dumping/subsidization of imports.

138. QSIP went from being predominantly export-focused to almost entirely import focused

during the POI. Subsection 37.1(3) of the SIMR requires the Tribunal to consider other

factors not related to the dumping in the injury analysis, including the export performance

of domestic producers and other factors that are relevant in the circumstances, to ensure

that any injury caused by those other factors is not attributed to the dumped imports.150

139. In June 2014, the FerroAtlantica Group announced plans to construct a $400 million,

100,000 MT silicon metal plant in Port Cartier, Quebec.151 It cancelled these plans in

December 2015 shortly before it merged with Globe.152 However the fact that this company

was taking serious steps toward such a large scale investment in a greenfield facility in

Canada suggests that FerroAtlantica believed that there was room for growth in the

Canadian silicon metal business. Given the stable levels of consumption within Canada,

150 Certain Refrigerators, Dishwashers and Dryers (Re), [2000] CITT No. 64.151 Tribunal Exhibit D-07: Public Attachment 16, CBC, "FerroAtlantica to build $382M silicon metal plant in

Quebec" (16 June 2014). 152 Tribunal Exhibit D-07: Public Attachment 17, News Release, FerroAtlantica, December 16, 2015, "New

market dynamics force FerroAtlántica to cancel its Port-Cartier project".

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these prospects would most likely have come from export sale opportunities. Instead of

seeking these opportunities, to its detriment QSIP relies on sales to two customers and trade

remedy complaints as a strategy to remain a viable company.

(b) Cost Inefficiency From Related Party Material Sourcing

140. The Complainant is reported as having relatively low costs of production by world

standards.153 However, there are certain materials that it appears to procure at unusually

high cost. Specifically, its reductant costs are abnormally high.154 QSLP sources coal from

a related party in the U.S., and may be paying non-arm's length, above market prices.155

11. Conclusion on Other Factors

141. It would be trite and incorrect to conclude that non-dumping, non-subsidization factors

described above make the domestic producer more vulnerable to unfair pricing. The

Tribunal is not permitted to attribute the effects of non-dumping and non-subsidization

factors to the imports of the subject goods. An injury finding is only permissible if the

dumping/subsidizing of goods is in and of itself a cause of injury that is material. The

Tribunal must separate and distinguish the adverse effects of the dumping and subsidizing

153 Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett, Confidential Attachment 18, CRU Cost Data Service Report (May 2017) at Table 1.3.

154 Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett, Confidential Attachment 18, CRU Cost Data Service Report (May 2017) at page 29.

155 Tribunal Exhibit D-07: Public Attachment 15, Globe Specialty Metals Inc., Form 10-K (Annual Report), Filed August 27, 2015 for the period ending June 30, 2015, at page 13: [Excerpt only]: "We control the supply of most of our raw materials. […] Alden Resources provides a stable and long-term supply of low ash metallurgical grade coal supplying a substantial portion of our requirements to our operations in the U.S., Canada and South Africa."; Tribunal Exhibit NQ-2017-001, Vol 4 PRO: Producers' Questionnaire, page 36.

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of goods from any adverse effects caused by other factors and determines whether the

impact of the former constitutes material injury.156

142. The Tribunal must distinguish generalized market phenomena such as global recessions or

price declines and ensure that the injury caused by these factors is not attributed to import

competition. For instance, in Hot-Rolled Carbon and Alloy Steel Sheet Products the

Tribunal stated the following:

…The Tribunal heard argument that the real causes of the price pressures and declines felt in the Canadian market were the developments in the world market for steel. Witnesses also referred to the "world spot price" of hot-rolled coil and to the fact that Canadian prices were bound to follow world prices. In this connection, the evidence shows that, since the third and fourth quarters of 1996, world prices for hot-rolled coil remained relatively stable until the last quarter of 1997 and have been on a steady downward trend since that time. The Tribunal notes that price trends in one part of the world influence prices in other parts of the world. The evidence also shows that, over the period of this inquiry, average Canadian prices declined significantly in conjunction with the decline in world prices. It is evident to the Tribunal that the Canadian market is not and cannot be insulated from world price pressures.157

143. This Tribunal also distinguished the lasting consequence of the 2008 global economic

recession in its decision in Aluminum Extrusions:

...The Tribunal is of the view that the domestic industry, along with the North American industry, has been affected by this economic downturn, starting in specific export market segments, such as the US housing industry in 2007, and spreading to reach all sectors of the Canadian economy in the last quarter of 2008. Indeed, the lack of demand in the United States impacted the price level of imports from the United States, as price became a driving factor in that competition… Accordingly, the Tribunal is of the view that, to a certain extent, the contraction in demand and the economic downturn negatively impacted the domestic industry during the POI. The Tribunal has not attributed to the dumping and subsidizing the impact resulting from the contraction in demand and the economic downturn…158

156 See e.g. Oil Country Tubular Goods, NQ-2009-004 (CITT) at para. 207 to 216; Appliances, CDA-USA-2000-1904-04 (Bi-national Panel) at 14.

157 Flat Hot-Rolled Carbon and Alloy Steel Sheet Products, Inquiry No. NQ-98-004 (2 July 1999) (CITT).158 Aluminum Extrusions, Inquiry No. NQ-2008-003, (1 April 2009) (CITT) at para 321.

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144. Accordingly, the Tribunal must consider the impact of the non-dumping, non-subsidization

factors described in these submissions and ensure that any injury caused by these factors

is distinguished from and not attributed to the imports of the subject goods.

B. Injury Was Not Material

145. Even if injury was suffered as a result of imports of dumped/subsidized goods, which is

not admitted, the injury was not material. Given its short duration and lack of intensity

against the backdrop of the 2014-2017 POI, any injury suffered by the Complainants has

not risen, and will not rise to the extent of materiality required for the Tribunal to make an

affirmative finding.

146. The period of review is from January 2014 to the present. The Complainant concedes that

the injury did not occur in 2014 or 2015 and manifested only at some point in 2016.159

There are already signs of improving U.S. Midwest prices, which means the basis of price

negotiation for domestic supply has received an important bump and prices are stabilizing.

This is attributable to changes in the U.S. market and not to the Canadian trade remedy

investigation. U.S. pricing was firming before the U.S. preliminary determination of

dumping.160 Canadian domestic sales volumes have also [ ], unrelated to the

Canadian trade remedy investigation. Therefore, the duration of injury is not material.

147. Neither has the injury been intense. While the decline in pricing and profitability claimed

has been of an important magnitude, when viewed over the entire period of review, it is

not material. The Complainant sold [ ]% of its available volumes over the POI, and [ ]%

159 Tribunal Exhibit AB-01 PUB: Public Case Brief of Quebec Silicon at para 80.160 Tribunal Exhibit D-02 PRO, Protected Attachment 3, Historical USD Exchange Rates 2014-2017.

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in 2016.161 The decline in market share between 2015 and 2016 that the Complainant

highlights are not representative because [____________________________________

].162 When market share is examined across the entire POI, the

Complainant [ ].163

C. Note Regarding CBSA Preliminary Determination

148. Magnitude of the margin of dumping is a factor that the Tribunal may consider in

determining whether the subject goods have caused injury under section 37.1(1) of the

SIMR. The Tribunal should be especially cautious in considering the magnitude of the

preliminary determination of margin of dumping in respect of exporters from Thailand

because it was likely calculated as the result of a mathematical or spreadsheet formula

error. Sica New Materials' normal values were calculated under section 19 of the SIMA.

Because Sica had no qualifying domestic sales during the POI, the CBSA calculated a

reasonable amount for profit on the basis of domestic sales of other responding exporters

in other countries under the authority of a Ministerial Specification.164 Counsel for Sica

New Materials requested protected disclosure on multiple occasions of the calculation

methodology behind this amount for profit because the amount did not appear to be even

161 Tribunal Exhibit NQ-2017-001-07A: Vol 2.1, page 159: Protected revised Investigation Report Table 32; Tribunal Exhibit NQ-2017-001-12.01: Vol 4, page 9-10: Protected Producer's Questionnaire, Schedule 3.

162 Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett, Confidential Attachment 13, Quote #2.

163 Tribunal Exhibit NQ-2017-001-07A Protected: Protected revised Investigation Report, Vol 2.1 page 163, Table 36.

164 CBSA Preliminary Determination Statement of Reasons, Certain Silicon Metal, SM2 2017 IN (20 July 2017).

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remotely supported by the evidence filed on the record by other exporters. Disclosure was

withheld by the CBSA.165

VII. NO IMMINENT OR FORESEEN THREAT OF FUTURE INJURY

149. Absent a finding of past/present injury, the CITT is precluded from making an affirmative

finding of "threat of injury" unless that threat is based on a change in circumstances that is

foreseen (likely real changes in circumstances) and imminent (reasonably anticipated to

commence within 12-18 months).166 This principle must not be applied based on mere

speculation, and must not be based on simple fear on the part of the domestic industry.167

The evidentiary threshold for a threat of injury finding is appropriately high because of its

exceptional nature.

150. The legal standard prescribed by the WTO Agreements and the SIMA is that the threat of

injury be: (i) material, (ii) clearly foreseen, and (iii) imminent.168 This requires, among

other things, that a threat finding be based on positive evidence of a change in

circumstances that is likely to lead to dumped/subsidized imports causing injury in the

imminent future (generally within the next twelve to twenty-four months).169 The standard

sets a relatively high threshold for the establishment of a threat of injury – near certainty

of material injury to the domestic industry is required.

165 CBSA List of Exhibits, SM2 2017 IN: http://www.cbsa-asfc.gc.ca/sima-lmsi/i-e/sm22017/sm22017-ex-eng.html, Exhibits 412, 413, 414, 415, and 418.

166 World Trade Organization, Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade, signed in Geneva on April 12, 1979, Article 3.7.

167 Dumping of Certain Corrosion-Resistant Steel Sheet (Re), [2001] CITT No. 51 at para. 98. 168 SIMA, 2(1.5).169 SIMR, Section 37.1(2).

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151. The WTO Agreements recognize that threat of injury matters must be decided with "special

care" and prohibit determinations based on "allegation, conjecture or remote possibility".

The SIMA reflects these international rules set out by the WTO Agreements.

152. The WTO Appellate Body's decision in United States – Investigation of the International

Trade Commission in Softwood Lumber from Canada explains the need for positive

evidence for a threat of injury finding:

Article 3.1 of the Anti-Dumping Agreement and Article 15.1 of the SCM Agreement are "overarching provision[s]" that [impose] certain "fundamental" obligations, in particular, that determinations of injury, including threat of injury, be based on positive evidence and an objective examination of the specific factors set out in these provisions. Article 3.7 of the Anti-Dumping Agreement and Article 15.7 of the SCM Agreement combine positive requirements—that such a determination "be based on facts" and show how a "clearly foreseen and imminent" change in circumstances would lead to further dumped/subsidized imports causing injury in the near future—with an express prohibition of a determination based "merely on allegation, conjecture or remote possibility".170

153. The evidence that the Complainant has provided are mere allegations based on speculation.

The Complainant does not point to any change in circumstance, other than the firming of

U.S. Midwest prices due to conditions in the U.S. market, and none which operate to

support the likelihood of injury. The Complainant's allegations do not present any real,

foreseen and imminent threat that could cause material injury.

2. U.S. Prices Are Recovering

154. Prices of silicon metal are already starting to recover from the 2016 lows.171 Average prices

in May 2017 and were 11% and 13% greater, respectively, than their average prices in June

170 WT/DS277/AB/RW at para.96.171 Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett, Confidential Attachment 3, CRU

Silicon Metal Market Outlook Report (March 2017) at pages 82-89.

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2016.172 This upward trend is forecasted to continue.173 This eliminates the principal cause

(unrelated to subject goods) of the Complainant's injury, which was depressed U.S. market

prices.

3. Canadian Market has Limited Attractiveness

155. The Complainant presents a direct price comparison as between Canada and the U.S., Japan

and the EU to illustrate the appeal of the Canadian market. This comparison does not take

into account the premium paid for higher-purity silicon used in silicone and polysilicon

manufacturing, which are the major drivers worldwide silicon demand distribution.174

Canada's aluminum-related consumption does not affect the distribution of total silicon

demand to the same extent.175

156. The Complainant's claim that Canada is an attractive market for silicon metal producers

ignores global market forces that the Complainant has itself cited in its forward-looking

statements regarding the growth of the solar industry.176 In reality, the Canadian market is

not particularly attractive for silicon metal producers for the simple reason that the silicon

172 Tribunal Exhibit D-07: Public Attachment 18: USGS Mineral Industry Surveys, Silicon in June 2017.173 Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett, Confidential Attachment 3, CRU

Silicon Metal Market Outlook Report (March 2017) at 82-89.174 Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett, Confidential Attachment 3, CRU

Silicon Metal Market Outlook Report (March 2017) at page 20. 175 Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett, Confidential Attachment 3, CRU

Silicon Metal Market Outlook Report (March 2017), page 20. 176 Tribunal Exhibit D-07: Public Attachment 19, Ferroglobe Investor Presentation (January 2017) at 9

refering to the "strong demand in solar"; Tribunal Exhibit D-07: Public Attachment 20, Ferroglobe.com "Electrometallurgical", stating that "Ferroglobe boasts great technological capacity that permits production of photovoltaic grade silicon metal, being competitive in one of the sectors with greatest growth potential in the next years".

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metal purchased in Canada is used for aluminum production, and is sold at lower prices

than the higher-purity silicon used in the chemical and solar industries.

4. World Capacity

157. The global and subject country "excess capacity" increases alleged by the Complainant are

not evidenced in a probative manner.177 The alleged "growing oversupply" cited by the

Complainant is not an imminent or foreseeable threat to domestic industry. In fact, [___

].178

5. RTA Supply Restrictions

158. RTA is limited in the suppliers from which it can source. This further serves to eliminate

any potential threat from theoretical world capacities. The following limitations are

described in the Witness Statement of Mark Pickett: 179

(vi) With Ferroglobe's strategy of centrally coordinating production volumes and

allocating production to particular markets, there are expected to be constraints on

availability of silicon metal from entities going forward.

(vii) As discussed above, a significant proportion of silicon producers are owned by

chemical companies and their supply is consequently captive or restricted for use

in chemical applications.

177 Tribunal Exhibit A/B-01: Public Case Brief of the Complainant, at para 254. 178 Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett, Confidential Attachment 3, CRU

Silicon Metal Market Outlook Report (March 2017), at page 12, Table V.179 Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett at para 45.

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(viii) RTA has had quality problems in 2013 with silicon metal from [ ],

and is not confident in it as a reliable source of supply.

(ix) RTA has never purchased silicon metal from [____________________________

].

(x) Chinese supply is unavailable to RTA as a result of the prohibitive anti-dumping

and countervailing duties in place against Chinese silicon metal from the Tribunal's

2013 finding.

(xi) Malaysian supply is currently unavailable since [__________________________

]. Half of the capacity from Thailand is also

unavailable due to [ ].180

(xii) Itochu Metals Corporation has expressed that [____________________________

].

(xiii) There is a producer in Bhutan that is too small to be useful.

180 Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett, Confidential Attachment 3, CRU Silicon Metal Market Outlook Report (March 2017) at page 51: "[

]."

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(xiv) RTA has occasionally purchased some off-grade materials [______________

].

(xv) Projects in Iceland are promising as sources of future supply, [______________

]. There have also been rumors that United Silicon has been

struggling with liquidity issues and that Ferroglobe is considering acquiring it.

(xvi) Simcoa in Australia occasionally has some volume available, [______________

].

(xvii) Advanced Metallurgical Group (which owns RW Silicium) in Germany is focused

on the European market and sells [____________________________________

].

(xviii) RTA considers Brazil to be [__________________________________________

].181

159. At the moment, [________________________________________________________

], and it at present [___________________________________

181 Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett at para 45.

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].182 There is therefore no evidence that suggests that

RTA will increase its import volumes in the next 12-18 months.

6. U.S. Dollar Exchange Rates

160. Depreciation of the value of the U.S. dollar should operate to make U.S. inputs and

U.S./Canadian production more competitive and, coupled with firming prices, less

vulnerable to imports and more profitable.183

7. Diversion Related to U.S. Trade Remedy Case

161. Even if the Complainant's U.S. affiliate is successful in its petition in the U.S., the

Complainant's suggestion that this would cause diversion into the Canadian market is

highly speculative and cannot form the basis of an injury finding.

162. Though the U.S. case has the potential to disrupt trade flows, none of Laos, Malaysia or

Thailand were included as named countries in the petition filed in the U.S. trade case, so a

diversion argument does not hold in respect of capacity from these countries. If anything,

the imposition of antidumping duties in the U.S. case is more likely to divert this capacity

away from Canada towards the lucrative U.S. market. In 2016 Laos, Malaysia and Thailand

accounted for [ ] of the subject imports, respectively.184

182 Tribunal Exhibit NQ-2017-001, Vol 6A PRO: [ ] Foreign Producers Questionnaire at 4.183 Tribunal Exhibit D-07: Public Attachment 19, Financial Times, "Dollar Plumbs 33-Month Low on

Hurricane and North Korea Concerns" (September 9, 2017); Tribunal Exhibit D-07: Public Attachment 20, Financial Times, "U.S. Dollar on Course for Longest Losing Streak in 14 Years" (August 29, 2017).

184 Tribunal Exhibit NQ-2017-001-07A Protected: Protected revised Investigation Report, Vol 2.1 page 163, Table 36.

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163. The U.S. consumes [______________________________________________________

] in silicon metal imports.185 The countries that export significant volumes to

the U.S. and are not named in the U.S. are Spain, South Africa and Canada. The silicon

production facilities in each of those countries are owned by Ferroglobe.186 The U.S.

respondents have submitted that (like RTA) they must source from multiple suppliers. They

have also stated in court documents that they see Ferroglobe as an unreliable producer.187

If anti-dumping duties are imposed in that case, U.S. purchasers are likely to seek suppliers

elsewhere, and in all likelihood imports into Canada from Laos, Thailand and Malaysia

would decrease.

164. If anything, a U.S. affirmative finding may accelerate the increase of U.S. Midwest indices

of pricing, which will have a positive effect on the Complainant price quotations.

165. In any event, the U.S. case is not decided at this juncture and the final outcome of the U.S.

case and its possible effects on trade flows is not known. Respectfully, by asking the

Tribunal to consider the outcome of the as-yet-undecided U.S. case, the Complainant has

asked the Tribunal to put itself in the inappropriate position of speculation on U.S. legal

proceedings for the purposes of deciding injury in Canada.

185 Based on CRU Data from 2016 Tribunal Exhibit D-04: Protected Witness Statement of Mark Pickett, Confidential Attachment 3, CRU Silicon Metal Market Outlook Report (March 2017) at page 12, Table V.

186 Tribunal Exhibit D-07: Public Attachment 13, Expert Report of Dr. Kivanc Kirgiz. (Exhibit 4 to the Joint Respondents Post-Conference Brief) at para 21.

187 Tribunal Exhibit D-07: Public Attachment 12, the Joint Respondents Post-Conference Brief at pages 2, 5, 21, 22.

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8. RTA Procurement Methodology

166. RTA has no plans to change its bifurcated approach to pricing; import prices will continue

to have no impact on Complainant prices negotiated by RTPS.

VIII. CONCLUSION

167. For these reasons, RTA respectfully requests that the Tribunal find that the dumping and

subsidization of exports of silicon metal originating in or exported from China have not

caused and do not threaten to cause, material injury.

Respectfully Submitted,

BENNETT JONES LLP 3400 One First Canadian PlaceP.O. Box 130 Toronto, Ontario, Canada M5X 1A4 Jesse I. GoldmanDarrel H. PearsonMilos BarutciskiMartin A.U. Sorensen Jessica HorwitzGeorge W.H. ReidJessica RobertsJulia Webster

Counsel to Rio Tinto Alcan, Inc.

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Canadian International Trade TribunalInquiry NQ-2017-001

SILICON METAL

List of Exhibits of Rio Tinto Alcan

Exhibit No. Description

D-01 PUB Public Case Brief of Rio Tinto Alcan

D-02 PRO Protected Case Brief of Rio Tinto Alcan

D-03 PUB Public Witness Statement of Mark Pickett

D-04 PRO Protected Witness Statement of Mark Pickett

D-05 PUB Public Witness Statement of Jean-Francois Laplante

D-06 PRO Protected Witness Statement of Jean-Francois Laplante

D-07 PUB Public Attachments to RTA Case Brief

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Attachments to Case Brief

No. DESCRIPTION

1. Wacker Chemie AG, "Silicones – Properties and Applications": https://www.wacker.com/cms/en/products/product_groups/silicones.jsp (accessed 10 September 2017) [PUBLIC]

2. Dow Corning Corp., "Everyday Uses of Silicon-Based Products": https://www.dowcorning.com/content/about/aboutmedia/everyday_uses_of_silicone.pdf (accessed 10 September 2017) [PUBLIC]

3. U.S. Federal Reserve Historical USD Exchange Rates 2014-2017 [PUBLIC]

4. Silicon Metal from China, Investigation No. 731-TA-472 (Fourth Review) (USITC), Final Results published in the Federal Register Vol 82, No 126, Monday July 3, 2017. [PUBLIC]

5. Ferroglobe PLC - Form 20-F: Annual and Transition Report (Foreign Private Issuer) (May 1, 2017) [PUBLIC]

6. "Hydropower supplies more than three-quarters of Brazil's electric power", U.S. Energy Information Administration, (June 17, 2014). Available at: https://www.eia.gov/todayinenergy/detail.php?id=16731 [PUBLIC]

7. Silicon Metal from Australia, Brazil, Kazakhstan, and Norway, U.S. ITC Investigation No. 701-TA-567-569 and 731-TA-1343-1345 (Preliminary) (1 May 2017) [PUBLIC]

8. UC Rusal, "Access Industries Holdings":https://www.accessindustries.com/holdings/uc-rusal/ (accessed 10 September 2017) [PUBLIC]

9. Ferroglobe PLC - Form 20-F: Annual and Transition Report (Foreign Private Issuer) (May 2, 2016) [PUBLIC]

10. "Silicon Metal Plant Debuts in U.S.," Anthony Poole, Insight – 2016 Global Metal Trends, S&P Global Platts (May 2016) [PUBLIC]

11. Globe Metallurgical, Inc. v. MS ENVTL. 192 So. 3d 1084 – Miss. Court of Appeals 2016 (May 17, 2016). [PUBLIC]

12. Post-Conference Brief of the Joint Respondents (without exhibits), filed before the United States International Trade Commission, In the Matter of Silicon Metal from Australia, Brazil, Norway, and Kazakhstan, Investigation Nos. 701-TA-567-569 and 731-TA-1343-1345 (Preliminary)(filed April 3, 2017) [PUBLIC]

13. Expert Report of Dr. Kirgiz, Exhibit 4 to the Post-Conference Brief of the Joint Respondents (without exhibits), filed before the United States International Trade

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Commission, In the Matter of Silicon Metal from Australia, Brazil, Norway, and Kazakhstan, Investigation Nos. 701-TA-567-569 and 731-TA-1343-1345 (Preliminary)(filed April 3, 2017) [PUBLIC]

14. Declaration of Tom Walters, Exhibit 6 to the Post-Conference Brief of the Joint Respondents (without exhibits), filed before the United States International Trade Commission, In the Matter of Silicon Metal from Australia, Brazil, Norway, and Kazakhstan, Investigation Nos. 701-TA-567-569 and 731-TA-1343-1345 (Preliminary)(filed April 3, 2017) [PUBLIC]

15. Globe Specialty Metals Inc., Form 10-K (Annual Report), for the period ending June 30, 2015 (Filed August 27, 2015) [PUBLIC]

16. “Silicon in June 2017”, USGS Mineral Industry Surveys, U.S. Department of the Interior & U.S. Geological Survey (August 2017). Available at: https://minerals.usgs.gov/minerals/pubs/commodity/silicon/mis-201706-simet.pdf[PUBLIC]

17. Financial Times, "Dollar Plumbs 33-Month Low on Hurricane and North Korea Concerns" (September 9, 2017) [PUBLIC]

18. Financial Times, "U.S. Dollar on Course for Longest Losing Streak in 14 Years" (August 29, 2017) [PUBLIC]

19. “Investor Presentation” Ferroglobe PLC (January 2017) [PUBLIC]

20. “Business Areas - Electrometallurgical” www.Ferroglobe.com (accessed September 10, 2017). Available at: http://www.ferroglobe.com/business-areas/electrometallurgical/?lang=en [PUBLIC]

21. Oppenheimer Stock Report: Ferroglobe PLC (August 31, 2017) [PUBLIC]

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List of Authorities

Aluminum Extrusions, Inquiry No. NQ-2008-003, (1 April 2009) (CITT).

Canada (Attorney General) v. Bri-Chem Supply Ltd., 2016 FCA 257.

Certain Refrigerators, Dishwashers and Dryers (January 16, 2002), CDC-U.S.C-2000-1904-04 (Bi-national Panel).

Certain Refrigerators, Dishwashers and Dryers (Re), Inquiry No.: NQ-2000-001, [2000] CITT No. 64 (1 August 2000) (CITT).

Cherry Stix Ltd. v. Canada Border Services Agency, Appeal No. AP-2008-028 (10 May 2010) (CITT).

Copper Rod, Inquiry No. NQ-2006-003 (12 April 2007) (CITT).

Dumping of Certain Corrosion-Resistant Steel Sheet (Re), Inquiry No. NQ-2000-008, [2001] CITT No. 51 (18 July 2001) (CITT).

Flat Hot-Rolled Carbon and Alloy Steel Sheet Products, Inquiry No. NQ-98-004 (2 July 1999) (CITT).

Hot-rolled Carbon Steel Plate (Re), Inquiry No. NQ-2013-005, [2014] CITT No. 64 (4 June 2014) (CITT)

I.D. Foods Superior Corp. v. Deputy Minister of National Revenue, Appeal No. AP-95-252, (12 December 1996) (CITT).

Oil Country Tubular Goods (Re), Inquiry No. NQ-2009-004 (December 29, 2009) (CITT).

Silicon Metal -004 (11 May 2017) (CITT).

Silicon Metal, Inquiry No. NQ-2013-003 (4 December 2013) (CITT).

Special Import Measures Act ("SIMA"), R.S.C., 1985, c. S-15.

Special Import Measures Regulations ("SIMR").

World Trade Organization, Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade, signed in Geneva on April 12, 1979, Article 3.7

WTO Appellate Body Report, Japan – Countervailing Duties on Dynamic Random Access Memories from Korea, (WT/DS336/ABR).

WTO Appellate Body Report, United States – Investigation of the International Trade Commission in Softwood Lumber from Canada (WT/DS277/AB/RW)

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Exhibit D-01 PUB Case Brief of Rio Tinto Alcan...PUBLIC 1 I. INTRODUCTION 1. This Case Brief is...

Documents

Transcript of Exhibit D-01 PUB Case Brief of Rio Tinto Alcan...PUBLIC 1 I. INTRODUCTION 1. This Case Brief is...