Copper, however, dipped, in line with expectations and Xstrata's peers, hit by lower grades and as several mines approach the end of their working life before new operations, including Antapaccay in Peru, start later this year.
While iron ore has become the focus of operations at several of the diversified miners, copper and coal account for more than 70 percent of Xstrata's profits. Both commodities are key planks of the miner's growth strategy, with supply issues expected to hold up copper prices, while Chinese and Indian demand for seaborne coal helps to support thermal coal prices.
Consolidated coal production totalled 85.3 million tonnes, helped by a 12 percent increase in Australian thermal coal production to 49.8 million tonnes which offset a dip in South African operations following strikes.
Output of coking coal, used in steelmaking, dipped to 7.6 million tonnes, disappointing some in the market, in what analysts said was an indication of continued robust input prices for the steel sector.
Today's numbers are generally in line with consensus but they show the impact all of the majors are facing on output volumes. Across the board, year-on-year, Xstrata's numbers are generally down, analyst Charles Cooper at Oriel said.
Total mined copper production was almost 3 percent lower at 888,979 tonnes. Xstrata saw production dip at its Alumbrera mine in Argentina and also Ernest Henry in Australia as well Collahuasi in Chile, which it owns with Anglo American
Most of the diversified miners have reported drops in copper production, with only Anglo American so far announcing a boost in the fourth quarter from its ramped-up Los Bronces mine.
Xstrata's shares were up 1.3 percent to 1,092 pence at 9:10 a.m., slightly underperforming a 1.5 percent rise in the market.
Analysts pointed to an unusually troubled 2011 and an expected boost from new projects in 2012.
Xstrata's 2011 production was impacted by massive rain events, seismic events, industrial action, equipment issues and lower grades, Deutsche Bank analysts said.
Lower grades at a number of the copper and zinc operations impacted production levels, but these will be corrected with project delivery over the near to medium term.
Zinc, hit by a shift to copper rich ores at the Antamina copper-zinc mine and lower volumes from Xstrata's Canadian operations, saw a 2 percent fall in concentrate production. Total zinc in concentrate dipped to 974,517 tonnes.
Xstrata said nickel production hit a record 105,925 tonnes, up 15 percent more than the previous year, helped by its Falcondo ferronickel operation in the Dominican Republic which outperformed the company's expectations by 8 percent.
Analysts and investors have been watching for news of progress on Xstrata's Koniambo ferronickel project in New Caledonia, but the company did not provide an update.
A fire destroyed administrative offices at the site in November, but Xstrata has said there was no impact to schedule.
In its alloys division, Xstrata saw the impact of weakening Chinese demand for South African ferrochrome and strikes, with ferrochrome volumes down 12 percent.
(Editing by Sudip Kar-Gupta and Mark Potter)