RPT-UPDATE 2-BHP Q3 copper output drops; CEO swipes at Rio

(Repeats to add story link, text unchanged)

By James Regan

SYDNEY, April 23 (Reuters) - BHP Billiton Ltd/Plc (BHP.AX) reported an 8 percent drop in third-quarter output of copper, its top revenue earner, even as its chief attacked the performance of rival and takeover target Rio Tinto Ltd/Plc (RIO.AX).

BHP, which has launched a hostile $147 billion all-share bid for Rio, also reported declines in nickel and aluminium output due to labour unrest and power disruptions, but said its Australian iron ore output rose strongly.

BHP's iron ore mines have been struggling to keep up with strong demand from Asian steel mills, but churned out 22 percent more ore in January-March than a year ago, despite the impact of heavy rains.

Analysts said BHP's production problems had been flagged to the market, with both BHP and Rio posting mixed reports.

"We knew there were some issues with copper, nickel and some of the others, so there were no real surprises," said ABN Amro analyst Warren Edney.

BHP Chief Executive Marius Kloppers took aim at recent comments by Rio Chief Executive Tom Albanese questioning BHP's strategy in oil, where it is a relatively minor player.

"On every metric I can envisage they [Rio] have been beaten. They have missed the boat on China, they are missing the boat on energy," Kloppers said in an interview with the Financial Times.

"It must be terrible [for them] that every quarter, BHP outperforms, and that has been the case for seven years," Kloppers said, adding he was incredulous that Albanese had criticised BHP's oil business even as crude galloped to record highs.

Rio has rejected BHP's offer of 3.4 of its shares for each Rio share as too cheap.

(For more on BHP/Rio, click [ID:nSYD110759])

MORE IRON ORE

In its quarterly report, BHP said iron ore output swelled to 28 million tonnes, beating Rio's 16 percent rise in the quarter.

China's new-found hunger for imported ore as it beefs up its steelmaking is taxing the limits of BHP and Rio to mine enough.

Kloppers has used the need to mine more iron ore as a reason for wanting to buy Rio, whose stock soared after its quarterly production report last week on talk that BHP might raise its offer.