BHP Billiton, the world's biggest miner, posted strong rises in iron ore and metallurgical coal output in the December quarter and said it was well positioned to reward shareholders as productivity increased.
BHP reported a 16 percent increase in iron ore production in the December quarter to 48.9 million tonnes and maintained its guidance for fiscal 2014, while its Queensland coal business hit record levels.
Investors in big mining companies, including fund manger BlackRock have called on miners to consider higher shareholder returns as the era of high construction costs to build new mines now shifts into production phases.
BHP Chief Executive Andrew Mackenzie said the company aimed to boost returns through financial discipline and internal competition for funds.
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"This strategy leaves us well positioned to deliver a substantial increase in free cash flow and higher returns to shareholders," he said in the December production report.