BHP Billiton has poured fuel onto the fire engulfing the iron ore sector in Australia, as it slightly increased its full-year production guidance for the commodity after delivering a 20 per cent lift in output in the third quarter.

In the three months to March 31, BHP produced 58.979 million tonnes of iron ore, a 20 per cent increase on the previous corresponding period.

In the year to date, BHP has produced a record 172.422 million tonnes, 17 per cent more than at the same time last year.

BHP now expects to produce 230 million tonnes in fiscal 2015, slightly higher than the previously flagged 225 million tonnes.

The miner increased its full-year guidance for Pilbara iron ore production by two per cent to 250 million tonnes after third-quarter production increased to 64.37 million tonnes from 54.81 million tonnes (100 per cent basis) a year earlier.

It also announced it was deferring the inner harbour debottlenecking project, admitting the decision would slow its expansion to a targeted 290-million-ton capacity, but that the expansion would now come at a lower cost.

BHP operates an expansive network of iron-ore mines, railway and port terminals in Australia's remote northwest, and also has iron-ore interests in Brazil.

Sustained weakness in the iron ore price in recent months has stoked a bitter fight within the industry over the actions of mining heavyweights, with several mid-tier miners hitting out at the production plans of BHP Billiton and Rio, in particular.

BHP Billiton chief executive officer Andrew Mackenzie said the miner's commitment to sustainably improve productivity and lower costs is helping mitigate the impact of subdued commodity prices and supporting returns for our shareholders.

“In iron ore, our focus remains on producing at the lowest possible cost with Western Australia Iron Ore unit costs now below $US20 per tonne as we continue to improve productivity," he said.

"Over the last decade, China’s unprecedented demand growth provided Australia and BHP Billiton with a unique opportunity.

"We acted swiftly to bring on new iron ore capacity at some of the lowest costs globally, generating long-term value for shareholders, the government and communities which would otherwise have been lost to overseas competitors."

Along with Rio Tinto, BHP is one of the world's lowest-cost iron ore producers and is believed to have a breakeven price of $US33 a tonne, slightly above Rio's $US32 a tonne.

Recently, BHP Billiton iron ore chief Jimmy Wilson described the dramatic price plunge to below $US50 a tonne as part of a normal commodity cycle and he vowed that the mining giant would “unashamedly” continue to add to the supply surge for at least another two years.

At the end of the latest session, benchmark iron ore for immediate delivery to the port of Tianjin in China was trading at $US50.80 a tonne, unchanged from the previous session.

Last week the commodity enjoyed its best run of the year with gains of almost 7 per cent and it now trades 8.8 per cent above the recent 10-year low of $US46.70.

Total petroleum production increased by 1 per cent in the third quarter to 61.5 million barrels of oil equivalent (mmboe) and full-year guidance remains unchanged at 255 mmboe.

Copper production in the quarter increased 11 per cent year-on-year to 460,000 tonnes, though full-year guidance was revised down to 1.7 million tonnes from 1.8 million tonnes.

The cut to guidance reflects the impact of heavy rainfall in northern Chile in March 2015 and an electrical failure which caused a mill outage at Olympic Dam in January 2015. Year-to-date production at Olympic Dam was down 15 per cent.

"The mill is expected to be offline for approximately six months with an associated reduction in copper production of 60,000 to 70,000 tonnes with the majority of the impact anticipated this financial year," BHP said.

Production of metallurgical coal in the third quarter was flat at 11.458 million tonnes and full-year guidance was raised to 49 million tonnes from 47 million tonnes previously.