Australian investors have a lot of options to choose from in the mining sector.
But which ASX 200 mining stocks could be top buys for them right now?
Let's take a look at three that brokers are currently recommending to clients. Here's what they are saying about these miners this month:
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Arcadium Lithium (ASX: LTM)
The first ASX 200 mining stock that could be a buy is lithium giant Arcadium Lithium.
Bell Potter thinks the company would be a good option for when lithium prices rebound. Particularly given its diversified exposure to the battery making ingredient. It said:
LTM provides the largest, most diversified exposure to lithium in terms of mode of upstream production, asset locations, downstream processing and customer markets. It is a key large-cap leverage to lithium prices and sentiment, which we expect to improve over the medium term. The group has a strong balance sheet and growth portfolio.
Bell Potter has a buy rating and $7.25 price target on its shares.
BHP Group Ltd (ASX: BHP)
The Big Australian could be an ASX 200 mining stock to buy according to analysts at Goldman Sachs.
The broker is positive on the miner due to its strong free cash flow (FCF) generation, which it believes justifies a premium valuation. It commented:
BHP is currently trading at ~6.0x NTM EBITDA (25-yr average EV/EBITDA of 6.6x), a slight premium to RIO on ~5.5x; and at 0.9xNAV vs RIO at 0.8xNAV. Over the last 10 years, BHP has traded at a ~0.5x premium to global mining peers. We believe this premium can be partly maintained due to ongoing superior margins and operating performance (particularly in Pilbara iron ore where BHP maintains superior FCF/t vs. peers).
Goldman has a buy rating and $48.40 price target on its shares.
Rio Tinto Ltd (ASX: RIO)
Goldman also thinks that Rio Tinto could be an ASX 200 mining stock to buy.
The broker likes the miner due to its production and FCF growth potential over the coming years. It explains:
RIO is a FCF and production growth story in our view, with forecast Cu Eq production growth of ~4-7% in 2025 & 2026 driven mostly by the ramp-up of the Oyu Tolgoi UG copper mine & a recovery at Escondida and Bingham, higher Pilbara Fe shipments with the ramp-up of new mines, and a rebound in aluminium production.
Goldman has a buy rating and $136.60 price target on its shares.
