Rio Tinto on Monday reported a boost in iron ore production in the fourth quarter, with expectations of lifting its output further as major projects come online in 2018.

The miner saw a three per cent increase in Pilbara iron ore output for the final quarter of the year, producing 87.9 million tonnes, and hitting its 2017 guidance figures, producing 329.8 million tonnes for the year.

It shipped 330.1 million tonnes in 2017, up one per cent year on year, making it the world's largest iron ore exporter, well above the second largest iron ore exporter BHP, which shipped 307 million tonnes for the year.

The miner has forecast iron ore shipment levels of between 330 and 340 million tonnes in 2018.

Rio Tinto remains focused on bringing its new Silvergrass iron ore mine up to capacity and had already processed around two million tonnes of iron ore by the end of 2017.

It achieved an average iron ore price of US$59.60 ($74.82) per wet metric tonne or around US$64.80 per dry metric tonne.

These prices are well below average 2017 iron ore prices of US$71 a tonne.

Deutsche Bank analysts are forecasting a weaker iron ore market ahead as Chinese demand softens.

"We expect Chinese steel production to increase from March and for both steel and iron ore prices to retrace from current levels," the analysts said in a note to investors.

"We have lifted our 2018 benchmark iron ore price forecast by 8 per cent to US$66 per tonne but have reduced our lump forecasts by US$3 per tonne to US$78 per tonne."

Coal output was significantly lower due to Rio Tinto's sale of its Coal & Allied stake in the Hunter Valley Operations (HVO) and Mount Thorley Warkworth (MTW).

Rio Tinto saw semi-soft coking coal output fall 51 per cent and thermal coal slip 17 per cent year on year.

Its hard coking coal output also fell due to Cyclone Debbie impacting performance in the first quarter of 2017.

Average thermal coal prices were around US$78 per tonne for 2017, while Rio Tinto saw hard coking coal prices fall eight per cent during the year, from a first-half price of US$177 per tonne down to US$164 per tonne by the end of the year.

Rio Tinto's diamond division performed strongly, with its Argyle diamond operations recording a 23 per cent year on year increase as it accessed higher grade tailings.

Copper was down nine per cent year on year as Rio Tinto saw industrial action at its Escondida mine in Chile, and hit lower grades at both Kennecott in the US and Oyu Tolgoi in Mongolia.

Fat Prophets analyst David Lennox described the fourth quarter as "pretty ordinary".

"Iron ore hit guidance, but overall it was a pretty ordinary operational result," Mr Lennox told Fairfax Media.

"Copper was disappointing, aluminium was disappointing, it was pretty flat.

"The fourth quarter made up for what was a slow three previous quarters for the year, but nothing really stood out."

Mr Lennox said despite the flat operations report, Rio Tinto can expect an improved financial performance thanks to strong commodity prices.

"Looking to their financial reports in February, Rio will see the benefit of higher prices, so we can expect a good earnings result," he said.

The miner also received a US$500 million offer for its French smelting operations, which is forecast to be completed in the second quarter of 2018.

Rio Tinto's share price opened strongly on Tuesday, spiking above $82.20 when trading began, but soon slipped 0.9 per cent by the end of the day to $81.46.