By James Regan
SYDNEY (Reuters) - BHP Billiton said on Wednesday it was pushing out the timetable to expand its iron ore output to 290 million tonnes a year, as it reported a 20 percent rise in quarterly output and upped its full-year guidance.
The world's third-largest iron ore miner said its operations were performing ahead of expectations, leading it to defer a project to increase the handling capacity at its Port Hedland iron ore port.
"While this will lead to a slower path to system capacity of 290 million tonnes per annum (Mtpa), it will come at a lower capital cost," BHP said in its March quarter report.
Spot iron ore prices have fallen 60 percent over the past year following a massive rise in production, which analysts and some mining executives blame on overestimates of China's appetite for imported ore by mega miners, such as BHP.
"Sounds like they're using technical jargon to say they're slowing production, without saying they're slowing production," said James Wilson, an analyst with Morgans Financial.
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BHP said iron ore output climbed 20 percent to 58.9 million tonnes in the March quarter versus a year ago, and revised up its 2015 full-year production guidance to 230 million tonnes, two percent above its previous guidance.
On a 100 percent basis, taking into account joint venture partners, BHP raised its Australian iron ore output guidance to 250 million tonnes, also up 2 percent.
"In iron ore, our focus remains on producing at the lowest possible cost with Western Australia iron ore unit costs now below $20 per tonne as we continue to improve productivity," Chief Executive Andrew Mackenzie said in a statement.
Big miners such as BHP and Rio Tinto have been able to cut costs more than smaller rivals, leaving them better able to weather the downturn in prices.
Prices of the steel-making material stood at $50.80 a tonne on Wednesday <.IO62-CNI=SI>.
Rio Tinto on Tuesday reported a 12 percent rise quarterly output to 74.7 million tonnes, signalling it was on track to yield 350 million tonnes in calendar 2015.
Analysts differ on the direction of iron ore prices.
Barclays is forecasting an average 2015 price of $56 a tonne, while Citi expects iron ore to average just $37 a tonne over the second half and only rise to about $40 by 2019.
(Editing by Richard Pullin)