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Our iron ore Pilbara operations produced 329.5 million tonnes (Rio Tinto share 270.7 million tonnes) in 2016, six per cent higher than in 2015. Sales of 327.6 million tonnes (Rio Tinto share 268.9 million tonnes) were three per cent higher than 2015, attributable to the newly expanded infrastructure and minimal disruption from weather events.
Pilbara iron ore revenues include $886 million of freight in 2016 compared to $918 million in 2015, following declines in freight rates period-on-period. Approximately 64 per cent of sales in 2016 were priced with reference to the current month average, 20 per cent with reference to the prior quarter’s average index lagged by one month, five per cent with reference to the current quarter average and 11 per cent were sold on the spot market. Approximately 62 per cent of 2016 sales were made on a cost and freight (CFR) basis, with the remainder sold free on board (FOB).
We own six pastoral stations in the Pilbara - Karratha, Hamersley, Rocklea, Juna, Yalleen and Yarraloola. We operate and manage Hamersley, Rocklea and Juna Downs. Yarraloola is subleased to Cardoo Holdings and Karratha is subleased to Ngarluma Aboriginal Corporation.
Our first agriculture project commenced in 2012 and comprises 16 centre pivot irrigators. Known as the Hamersley Agricultural Project, it represents an innovative use for excess water from the nearby Marandoo mine as it is developed below the water table. Covering 750 hectares of land, the water supply is used to grow fodder that is turned into hay and purchased by cattle stations across the Pilbara. The agriculture project is situated on Hamersley Station adjacent to Karijini National Park and will operate for the life of the mine.
Following the successful establishment of the Hamersley Agricultural Project, we commissioned the Nammuldi Agricultural Project in June 2014. This project utilises mine water from the below water table component of the nearby Nammuldi and Silvergrass mines and consists of 19 pivots with the capacity to irrigate up to 900 hectares.