BHP Billiton, the world's biggest miner, churned out as much copper, iron ore and coal as it could in the first quarter to keep up with surging China-driven demand, but failed to impress investors.
Iron ore production was at a record, BHP said, while production of copper, the company's top revenue earner, swelled 23 percent on a year ago, to 307,800 tons, though it was 10 percent below the previous quarter.
BHP shares, up 80 percent so far this year, dropped 1.2 percent in Sydney trading, while the broader Australian S&P/ASX 200 Index rose.
Shaw Stockbroking analyst John Colnan, maintaining a hold recommendation on BHP, said there were few surprises in the quarterly review, with iron ore at a record, while petroleum and nickel were down slightly.
Petroleum output was in line with prior quarters, reflecting strong reservoir performance that helped offset natural field decline, BHP said.
China's hunger for imported raw materials, which was leading a global commodities boom, saw BHP increase lead production by 25 percent after rehabilitation work was completed at its Cannington mine, boosting operations.
Aluminium output was unchanged, oil and condensate output dropped 7 percent, while iron ore production rose 7 percent to 25.87 million tons, it said.
BHP also announced cost increases at the Atlantis South project and Neptune oil projects in the United States, where it has substantial stakes, of 8.6 percent and 35 percent respectively.
Analysts said they were looking to the iron ore operations to contribute more to the bottom line this year on expectations of much higher ore sales.
BHP and rival iron ore miners such as CVRD and Rio Tinto are hoping for a sixth straight year of price hikes, boosted by growing demand led by China's steel industry, the world's biggest ore
Iron ore prices are expected to rise 25 percent from April in latest term price talks with China, according to a Reuters poll of analysts.
BHP, which has been trading at around 13.5 times earnings, is pegged by analysts to show an improved profit of more than $14 billion in the 2008 financial year.
Rising prices for everything from oil to diamonds, BHP's control of the world's largest copper mine and a large share of the single largest iron ore deposit were behind the forecasts.
Nickel production was down 13 percent in the first quarter, owing to maintenance work at BHP's Kalgoorlie smelter.
Metallurgical coal output rose 4 percent. Thermal coal dropped 4 percent.