Canada-based First Quantum has announced an extension of its copper sales hedge programme to ensure a “certain level of cash flow” during the commissioning and ramp-up of its large openpit copper mine development in Panama.

This comes as concern about trade wars are hurting copper prices, which have fallen sharply in the past two months, despite no let down in demand for the red metal.

First Quantum chairperson and CEO Philip Pascall said on Tuesday that demand for copper remained robust. “We continue to sell all of our production into a market where there is excess demand. This supports our belief that the pressure on the copper price is not driven by fundamentals.”

The extended copper hedge programme covers 25 000 t of unmargined copper forward sales contracts at an average price of $3.15/lb with periods of maturity to December 2018, and 98 000 t of zero-cost collar unmargined sales contracts at weighted average prices of $3.04/lb to $3.45/lb with maturities to June 2019.

“We think it is prudent to extend our copper sales hedge program on a limited basis. The intent is to ensure a certain level of cash flow during Cobre Panama's commissioning and ramp-up phases that precede commercial operations," Pascall said in a statement, accompanying the company’s second-quarter results.

The hedge programme is extended despite First Quantum reporting that forward sales had reduced its sales revenue by $45-million in the June quarter.

The miner, which owns and operates mines in Africa, Europe and Australia, reported sales revenue of $1.05-billion in the three-month period, compared with $782-million in the prior-year quarter, resulting in net earnings of $135-million, or $0.20 a share, compared with a loss of $35-million, or $0.05 a share, in the second quarter of 2017.

The higher sales revenue is the result of an increase in copper revenues, mainly from the Sentinel mine, in Zambia.

The group produced 150 950 t of copper in the June quarter, compared with 141 912 t in the comparable period of 2017 and sold 152 403 t, compared with 139 521 t a year earlier.

Gold production and sales were lower at 46 467 oz and 48 172 oz, respectively, compared with 50 040 oz and 52 020 oz in the same quarter of 2017. The decrease was attributed to lower gold production at Kansanshi, in Zambia, and Guelb Moghrein, in Mauritania, mainly owing to lower gold feed grade.

First Quantum has maintained its production guidance of 240 000 t of copper and about 145 000 oz of gold in 2018 despite State-run Zesco requesting the Kansanshi complex to reduce is power consumption for a 31-day maintenance period starting in late July.

Meanwhile, at the Cobre Panama project, First Quantum has started commissioning activities at the process plant. The project was 76% complete at the end of June.