If you’re wanting to gain exposure to the resources sector, then it could be worth looking at the shares listed below.
Here’s why analysts say these ASX 200 resources shares could be in the buy zone right now:
Allkem Ltd (ASX: AKE)
The first ASX 200 resources share to consider is Allkem. It is a top five global lithium miner with a collection of world class operations including Olaroz, Mt Cattlin, and the Sal de Vida brine project.
Allkem is currently producing a significant quantity of lithium from its operations, which is allowing it to benefit greatly from sky high prices.
But it isn’t stopping there. The company recently revealed plans to increase its production three-fold by 2026. Management expects this to allow the company to maintain a 10% share of the global lithium market over the next decade.
And while lithium prices will inevitably crash back down to earth in the coming years as supply increases, Allkem’s low costs leave it well-placed to operate with strong margins even then.
It is partly for this reason that Morgans is bullish on the company. Its analysts currently have an add rating and $16.98 price target on Allkem’s shares.
Rio Tinto Limited (ASX: RIO)
Another ASX 200 resources share that could be in the buy zone is mining giant Rio Tinto.
It has exposure to a range of commodities, such as iron ore and copper, which are commanding strong prices right now. This bodes well for its cash flow generation and ultimately its earnings and dividends.
In addition, the company has a number of growth projects in the works that look set to boost production in the near future.
It is for these reasons that Goldman Sachs has a buy rating and $135.10 price target on its shares. It is expecting Rio to “return to production growth in mid-2022 on higher iron ore and copper volumes.”