Lithium and uranium: 2 ASX mining stocks to buy now

Here's why analysts say these mining stocks are in the buy zone now and could have bright futures.

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Two commodities that look set to be vital to the decarbonisation of the planet are lithium and uranium. Fortunately for Australian investors, there are plenty of ways to gain exposure to them on the local share market.

But which ASX mining stocks are the way to do it? Well, two mining stocks that offer exposure and come highly recommended are listed below. Here's what analysts are saying about them:

Allkem Ltd (ASX: AKE)

The team at Goldman Sachs sees lithium giant Allkem as an ASX mining stock to buy right now.

Although the broker has (correctly) been warning that lithium prices will weaken significantly in the near term, it still rates Allkem as a buy. This is because it expects the company's production growth plans to support its earnings when prices fall. The broker explains:

Allkem has one of the best production outlooks in our lithium coverage, with broad-based growth optionality. This drives our forecast for the company's equity LCE production growth of ~4x over five years to FY28E, supporting earnings rebounding to near current record levels despite the declining lithium price environment.

Goldman has a buy rating and a $16.80 price target on its shares.

Deep Yellow Limited (ASX: DYL)

If you're more bullish on uranium then you may want to consider this ASX mining stock instead.

Deep Yellow has two advanced uranium projects, its flagship Tumas project in Namibia and its Mulga Rock project in Western Australia. Management notes that both projects are located in tier-1 uranium jurisdictions and have a potential production capacity of more than 7Mlbpa.

Bell Potter is feeling very positive about the company's outlook. It commented:

[W]e see DYL in pole position to capitalise on the momentum and advance its two flagship projects into production within the next 3-4 years. With average planned production capacity at Tumas of ~3Mlbpa over 22 years and ~3.1Mlbs over 15 years at Mulga Rock, DYL offers longevity at the perfect point in the uranium price cycle.

The broker currently has a speculative buy rating and a $1.84 price target on its shares.

Motley Fool contributor James Mickleboro has positions in Allkem. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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