Vedanta posts record output of iron ore, aluminium

* Q4 output of saleable iron ore up 59 pct to 7.8 mln tonnes

* Q4 aluminium output rises 19 pct to 159,000 tonnes

* Q4 output of refined zinc steady at 150,000 tonnes

By Julie Crust

LONDON, April 8 (Reuters) - Indian-focused mining group Vedanta  posted record quarterly production of iron ore and aluminium in its fourth quarter ended March 2010, helping it take advantage of rising metal prices.

Fourth-quarter production of saleable iron ore, its second most profitable product, jumped 59 percent to 7.8 million tonnes, taking its annual output up 34 percent helped by Dempo's contribution and its Sesa Goa operations.

Rising demand from steelmakers has resulted in an almost threefold increase in spot iron ore prices over the last 12 months.

Tim Huff, an analyst at RBS, said the production figures were fairly benign/slightly positive on the surface, but support the medium term volume growth/cost reduction story for Vedanta.

Aluminium output in the fourth quarter rose 19 percent to a record 159,000 tonnes, with full-year production rising 15 percent from 2009.

Output of refined zinc, the group's most profitable product, was little changed at 150,000 tonnes in the fourth quarter.

Vedanta was the second best performing stock on the blue chip FTSE 100 index last year, surging 327 percent, and had climbed about 12 percent this year.

At 0714 GMT on Thursday, the shares were down 1.3 percent at 2,881 pence, in line with the weaker UK mining index.

(Editing by Paul Sandle and Jon Loades-Carter)