VANCOUVER (miningweekly.com) – An announcement Monday by the world’s largest uranium producer, the National Atomic Company of the Republic of Kazakhstan (Kazatomprom), that it would curtail another 20% of output for three years, starting from January, sent most TSX-listed uranium companies’ equities soaring.

The national miner said it was committing to the production cut to better align its output with demand.

The decision will see the miner defer production of about 11 000 t of uranium over the period, of which about 4 000 t in 2018 represents about 7.5% of global output. Kazatomprom, accounts for about 21% of global output, but it mostly sells into the spot market, which has been crawling sideways for several quarters now.

Uranium prices have fallen by more than 70% since the Fukushima accident in March 2011 and remain at unsustainably low levels. Long-term contract pricing has fallen to the lowest price since June 1, 2005, at $30/lb of yellow cake, with spot prices hovering at the $20/lb level.

Kazatomprom assured customers that no contractual obligations would be affected by the announced cutbacks.

"Given the challenging market conditions, and in light of continued oversupply in the uranium market, we have taken the strategic decision to reduce production in order to better align our production levels with market demand. We believe that these measures strongly underline our commitment to ensuring the long-term sustainability of uranium mining; a critical component in the generation of clean, carbon-free electricity around the globe,” said Kazatomprom chairperson Galymzhan Pirmatov in a press release.

Following the announcement, most of the TSX and TSX-V-listed uranium companies lit up in green.

Canada’s largest producer of yellow cake, Cameco, gained nearly 18% in the morning session to change hands at C$14.18 a share, followed by smaller companies such as Denison Mines gaining 19% to C$0.75 a share; NexGen Energy gaining more than 17% to C$3.48 a share; Fission Uranium gaining 13.64% to trade at C$0.75 a share, Uranium Participation Corp rising nearly 8% to C$4.50 a share; and Energy Fuels climbing nearly 17% to C$2.52 a share.

Large producers such as Cameco have shuttered several mines in the wake of falling prices, and Kazatomprom has already announced production paring twice this year. The outlook for uranium remains unclear.