Actually if it’s simply a put the profits on the hedge stand independently of what they actually produce. They could lift the hedge at any moment or take the opposite bet to offset it regardless of their actual production. It seems to me it would be more advantageous to lift part of the hedge at a profit and then produce less since the price is way under the cost of production.
Unless them producing more drives the payout on the puts up more than what they pay for production (minus world prices).
Oh, and of course, this is all politics. They are not just maximizing profits, but they also have to worry about the optics of firing redundant workers, if they stop production.
