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MELBOURNE, Jan 23 AAP

January 23 2013, 2:56PM

BHP Billiton is on track to lift its full year iron ore production after enjoying a better-than-expected result in the final three months of 2012.

BHP beat analysts' expectations on Wednesday with iron ore production of 42.19 million tonnes for the three months to December 31, up three per cent on the prior corresponding period.

Analysts had forecast a flat result for iron ore in the December quarter.

The result took BHP's iron ore production for the first half of its 2012/13 financial year to 81.96 million tonnes, up two per cent on the same period a year ago.

BHP maintained its production forecast of 183 million tonnes of iron ore for 2012/2013, a five per cent rise on last financial year.

Investors welcomed the result, with BHP's shares up 52 cents, or 1.42 per cent, to $37.10 at 1443 AEDT.

BHP said the rise in production, plus record sales for iron ore, were a result of its spending on improving supply chain capacity.

The company has forecast long-term growth for its iron ore operations on the back of expansion at its Jimblebar mine and progressive infrastructure improvements.

Resources analyst Gavin Wendt, of Mine Life, said overall the production report was very sound, and the iron ore result outstanding.

The ramp-up of iron ore operations in Western Australia appeared to proceeding well, and BHP was in a position to take advantage of strong prices.

"It (the production report) had a lot going for it and the market should be pretty happy," Mr Wendt said.

Elsewhere, BHP's total petroleum production in the first half was 121.15 million barrels of oil equivalent (mmboe), up 11 per cent.

Full year guidance for total petroleum production remained unchanged at 240 million mmboe.

BHP's production of oil and gas liquids rose four per cent thanks to growth in United States.

However the strong US results were offset by a seasonal reduction in production in Australia's Bass Strait and a natural field decline at BHP's Pyrenees operation in Australia.

Natural gas production in the first half rose 15 per cent to 452.51 billion cubic feet.

Energy coal output lifted seven per cent and production of metallurgical coal was in line with the same period in the prior year.

First-half copper production lifted by 14 per cent on the back of record production at Antamina in Peru and a 70 per cent lift in copper-in-concentrate production at Escondida in Chile.

Total Escondida copper production was on track to increase by 20 per cent in the 2013 financial year.

Mr Wendt said copper would become more important for BHP as China shifted from an industrial to consumer focus and more copper would be needed for use in white goods and cars.

City Index chief market analyst Peter Esho said BHP's overall production figures were "rock solid".

"I think if spot prices for their (BHP Billiton's) key commodities remain at current levels there will be a significant upgrades after the company reports (its financial results) in February," he said.

By Trevor Chappell