The uranium price slump has forced the world's largest producer, Cameco, to temporarily suspend production at two key operations from next year, driving Australian uranium miners' shares skywards.
Canadian giant Cameco on Thursday said it would shutter its MacArthur River mining and Key Lake milling operations for 10 months by the end of January, pulling a significant chunk of production from the world market.
The news triggered a spike in the stock prices of local producers, with Toro Energy jumping 20 per cent, Aura Energy 31 per cent, Peninsular Energy 29 per cent, A-Cap Resources 10 per cent, Pepinni Minerals 11 per cent, Greenland Minerals and Energy 15 per cent and Cauldron Energy more than 12 per cent.
Uranium prices have fallen more than 70 per cent since Japan's Fukushima nuclear power plant meltdown following a tsunami in 2011 and have reached what uranium miners call "an unsustainably low level".
"With the continued state of oversupply in the uranium market and no expectation of change on the immediate horizon, it does not make economic sense for us to continue producing at McArthur River and Key Lake when we are holding a large inventory, or paying dividends out of proportion with our earnings," Cameco's president Tim Gitzel said in a statement.
Cameco's move comes after Kazakhstan, the world's largest uranium producing nation, announced it was cutting output by 10 per cent earlier this year due to poor market conditions.
Peter Reeve, the chairman of local uranium junior Aura Energy, said Cameco's announcement was enormous for the market, but not surprising.
"This is significant for the uranium market, and frankly, three years overdue," Mr Reeve told Fairfax Media.
"When someone the size of Cameco takes action such as this in the market, it has a significant impact.
"Kazakhstan may also carry out further cuts on the back of this."
Mr Reeves said his company's share price spike was "completely shocking".
Uranium miners have seen utilities turn away from longer-term contracts since Fukushima, and focus increasingly on the spot market, driving the price of uranium below production costs.
"Hopefully this is a turning point for uranium," Mr Reeve said.
Far East Capital analyst Warwick Grigor was less positive on the movement, stating it was likely to be a short term speculation.
"Speculators saw that Cameco had cut production and reacted," Mr Grigor told Fairfax Media.
He stated that Cameco's suspension of operations makes sense, as at current uranium prices mining is not profitable.
"It's more valuable in the ground," he said.
"I don't see this as a turnaround for the uranium price; at best they will stay where they are, but it doesn't signal a boom in price."
As Cameco will draw down on its existing stockpiles, and may come online again if prices improve significantly, it puts companies not already in production unlikely to be in a position to take advantage of positive market movements.
"The market has a subdued outlook," Mr Grigor said.
"Speculators will get burnt."
Cameco is one of the world's largest uranium producers, accounting for about 17 per cent of global production from its mines in Canada, the US and Kazakhstan. Its MacArthur River and Key Lake operations together produced 11.1 million pounds of uranium in the first nine months of 2017.
Uranium is currently priced at around US$19 ($24.75) per pound.