Resources giant BHP Billiton expects to achieve a 15th straight year of record iron ore production after smashing expectations with a 20 per cent boost to annual output in 2013/14.
Analysts believe BHP could also surprise the market with stronger than expected revenues when it delivers its annual financial results in August.
BHP produced 204 million tonnes of iron ore in the Pilbara in 2013/14, the 14th consecutive year of record output, and higher than its initial guidance.
It is forecasting a further 11 per cent rise to 245 million tonnes in this financial year.
Chief executive Andrew Mackenzie said BHP was on track to achieve its target of 16 per cent production growth across all commodities for the two years to the end of June 2015.
"Our focus on productivity has resulted in a significant improvement in operating performance at each of our major businesses this year, with a nine per cent increase in group production and record output at 12 operations," he said.
BHP will remain focused on "value over volume", he said, prioritising its existing projects and considering the next phase of simplifying its mining operations.
Shares in the company were boosted by the report, adding 47 cents, or 1.2 per cent, to $38.98.
CMC Markets strategist Michael McCarthy said the record iron ore production was "well over estimates", and expects BHP's revenue may have grown in the year, despite most analysts expecting a fall.
The company's annual production increase matched the increase in iron ore imports to China, he said.
"Chinese accounts also showed the value of imports was up five per cent, so I expect when we see BHP's financial results it's likely to surprise the market," Mr McCarthy said.
An increase in Chinese iron ore supply would force high cost producers out of the market and ultimately lead to a healthier price for low cost producers like BHP, he said.
BHP received an average realised price of $US96 per tonne for its iron ore during the second half of the financial year, down from $US112 a tonne in the preceding six months.
Mine Life resources analyst Gavin Wendt said iron ore and coal were the two standout commodities in BHP's business.
"Iron ore and coking coal production ramp up is ahead of schedule so the result surprised on the upside," he said.
BHP's output of coking coal, used mainly in steel making, grew 20 per cent to 45 million tonnes in the year to June.
BHP also said it expects to take an earnings hit of between $900 million and $1.3 billion due to mine site rehabilitation costs and redundancy payments.
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