In its production report for the 2009-10 financial year, the world’s largest miner said it remained cautious on the global economy’s short-term outlook.

“Uncertainty surrounds the near-term prospects for growth in the developed world as governments adjust fiscal policies following a period of significant stimulus and subsequent increase in sovereign debt levels,” BHP said.

“Within China, measures introduced to reduce growth to more sustainable levels means volatility in commodity end-demand is likely to persist.

“BHP Billiton sees these measures as a normal continuation of China’s economic management policies.”

Metallurgical coal production for the year gained 3% to 37.38Mt while June quarter production added 34% to 10.9Mt thanks to improved operational and supply chain performance, supported by strong demand.

The March quarter was impacted by wet weather disruptions at Queensland Coal and planned longwall moves at Illawarra. Despite this, Queensland Coal achieved record annual and quarterly shipments.

Energy coal production for the year was 66.1 million tonnes, in line with the previous year with the continued ramp-up of the Klipspruit expansion and record production at Hunter Valley Energy Coal offsetting lower customer demand at New Mexico Coal.

Cerrejon Coal achieved record production during June 2010 quarter, however this was offset by weather disruptions and a strike by the rail services provider in South Africa as well as plant upgrade activities related to the MAC20 project at Hunter Valley Energy Coal.

On the iron ore front, BHP reported its tenth consecutive annual output record from its Pilbara iron ore division with output of 124.96Mt, up 9% on the previous year.

Despite the record annual figures, BHP said final quarter production was impacted by tie-in activities at its iron ore operations for its Rapid Growth Project 4 which will take the iron ore major’s production in the Pilbara to 155 million tonnes per annum.

As a result, June quarter production came in at 31.24Mt compared to 27.1Mt in previous corresponding period but only slightly higher than the 31.16Mt reported in the March quarter.

On to copper and production for the year was 1.07Mt, 11% lower than the previous year, due to the Olympic Dam shaft outage, industrial action at Spence, lower grades at Cerro Colorado and Antamina in Peru, and the cessation of sulfide mining at Pinto Valley in the United States.

The Melbourne-based miner said the annual result was partly offset by higher grade and recovery at Escondida in Chile, however production from the massive mine is expected to fall by 5-10% in the 2011 financial year, mainly due to lower grade.

Despite the dip in annual copper production, June quarter output was 291,100t, up 27% on the March quarter, due to strong performance at Escondida, a return to full capacity at Spence and improved plant utilisation at Cerro Colorado.

During the final quarter, Olympic Dam restarted hoisting from the Clark Shaft and has returned to full production.

The Clark Shaft outage at Olympic Dam also hindered uranium production with uranium oxide concentrate down 43% year-on-year to 2279t and down 700% quarter-on-quarter to 712t.

Nickel West achieved record nickel production for the year of 173,400t, up 25% on the previous year, following the major furnace rebuild at the Nickel West Kalgoorlie smelter in 2009.

Nickel output for the June quarter gained 6% quarter-on-quarter to 45,700t although it was impacted by disruptions to hydrogen supply at the Kwinana refinery and an unplanned outage at Nickel West Kalgoorlie.

In zinc, BHP’s output for the year gained 21% to 198,279t due to higher plant throughput and utilisation and higher grades at Antamina and Cannington. Despite the annual increase, zinc output fell 3% quarter-on-quarter to 45,422t.

Meanwhile, in its exploration and development report, BHP reported the Newcastle third port project was completed in June 2010, ahead of schedule and budget.

BHP also announced a further three projects achieved first production and two projects were sanctioned for development during the year.

In addition, BHP approved $US2.4 billion of pre-commitment expenditure to accelerate development of its Rapid Growth Project 6 in the Pilbara, Caval Ridge and Hay Point Coal Terminal Stage 3 Expansion and the first stages of the Jansen potash project.

Shares in BHP have gained 60c to $38.90.