BHP Billiton may be 'cautious' about the outlook for global growth and demand for its many commodities, but it is at least realistic on China.

The company said in yesterday's 12 month production report that it "continues to be cautious on the short term outlook for the global economy".

"Uncertainty surrounds the near term prospects for growth in the developed world as governments adjust fiscal policies following a period of significant stimulus and subsequent increase in sovereign debt levels."

That reads a bit like the minutes of the Reserve Bank's July board meeting, minus the stuff on local inflation.

And on China, it has a similar view to that of the RBA - watchful, confident and understanding - unlike so many other western companies and commentators who continually try to fit the Chinese economy into an Australian or US economic framework.

BHP said, "Within China, measures introduced to reduce growth to more sustainable levels means volatility in commodity end-demand is likely to persist.

"BHP Billiton sees these measures as a normal continuation of China's economic management policies."

So while demand for iron ore and coal will settle down as steel production settles, it won't produce a plunge of nasty proportions.

BHP said its various divisions performed well, with petroleum and iron ore divisions achieving annual production records.

But copper, gold and uranium output was affected by the slashing of 80% of the capacity of the huge Olympic Dam mine in South Australia, one of the world's largest copper, hold and uranium mining operations.

In contrast, BHP said its Shenzi (USA) and Pyrenees (Australia) oil fields (both operated by the company) "performed at or above design capacity during the year".

"Western Australia Iron Ore achieved its tenth consecutive annual production record. Samarco (Brazil) also achieved quarterly and annual production records.

"Annual production records were also achieved at North West Shelf, Hunter Valley Energy Coal, Worsley, Nickel West and Poitrel (all Australia), Alumar refinery (Brazil) and Zamzama (Pakistan).

"Quarterly production records were achieved for manganese alloy, Cerrejon Coal (Colombia) and Samancor Metalloys (South Africa)."

The company said its production of petroleum products rose 15% in 2010 and iron ore production for the year ended June 30 was up 9% on the previous year, and up 16% in the fourth quarter compared to the prior corresponding period.

The production boost to iron ore reflected the strong contract prices the company was able to achieve after it abandoned using the old benchmark pricing system.

''Our expectation is that future Western Australia iron ore shipments will be priced on this basis,'' the miner said.

Metallurgical coal production for the year also rose, up 3% on the prior year, supported by strong demand.

BHP said 34% of metallurgical coal shipments were priced on a shorter term basis for the year as it moved away from benchmark pricing, and in the June quarter most of its metallurgical coal was priced on a shorter term basis.

Energy coal (thermal or steaming coal) production was steady compared to 2009.

The impact of an outage at its giant Olympic Dam project in October following problems with a haulage unit impacted on the company's production of some commodities.

Olympic Dam in South Australia is the world's largest uranium deposit, fourth largest remaining copper deposit and fifth largest gold deposit.

Copper production at the mine was down 11% on the previous year, while uranium production fell 43% and gold fell 19%.

Production of alumina rose 9% for the year and aluminium output was 1% higher.

Copper output for fourth quarter dropped 5% from a year earlier.

BHP said yesterday that Olympic Dam is now back at full capacity after running at only about 20% of capacity since the accident last October.

A quarterly production record was recorded for manganese alloy in the final quarter of 2009-10.

Nickel production rose 25% in the year to June 30, following a major furnace rebuild to its Kalgoorlie smelter in the 2009 financial year.

BHP said that drilling activities at Atlantis (USA) and Shenzi fields in the Gulf of Mexico (BP is a co-owner) "ceased during the June 2010 quarter".

"BHP Billiton continues to monitor and assess the impact of the six month suspension of certain permitting and drilling activities in the Gulf of Mexico."

BHP shares rose by just over 1%, or 45c, to $38.75.