If you’re wanting to gain a little exposure to the mining sector, then you may want to check out the ASX mining shares listed below.
They have been named among Bell Potter’s top picks for FY 2023. Here’s what the broker is saying:
Arafura Resources Limited (ASX: ARU)
The first ASX mining share that Bell Potter rates highly is Arafura Resources. The broker sees a lot of potential in the company’s Nolans rare earth project. It estimates that it could supply upwards of 8% of the permanent magnet market for electric vehicles and wind turbines.
Bell Potter also highlights that a deal is in the work with Hyundai for up to 30% of its production for the first seven years of operation.
ARU’s advanced Rare Earth (RE) project, Nolans, is anticipated to feed potentially 8% of global supply directly into the permanent magnet market servicing expansion of electric vehicles and wind turbines. ARU will look to reach a final investment decision by the end of CY22, with first production expected around the end of CY24 subject to funding which is predicated on securing 85% of planned production over the first 7-10 years. The first step towards binding offtake was taken with Hyundai signing an MoU for up to 30% of production over 7 years beginning in 2025.
The broker currently has a speculative buy rating and 60 cents price target on its shares.
Nickel Industries Ltd (ASX: NIC)
Another ASX mining share that Bell Potter likes for FY 2023 is Nickel Industries. The broker is expecting this nickel producer, formerly known as Nickel Mines, to deliver strong earnings growth thanks to increasing production.
NIC has grown to become the largest nickel producer on the ASX and built a track record of ahead-of-schedule project delivery, achieving steady state production above nameplate and returning capital to shareholders. Despite rising input costs in CY22, NIC has been able to maintain and expand margins and following the successful commissioning of the Angel Nickel Project, NIC is on track for earnings growth of over 60%. In CY23, the Oracle Nickel project is on schedule to lift attributable production to ~80ktpa Ni in NPI and drive earnings growth of ~70%. NIC is trading on undemanding valuation multiples and remains one of our Top Picks for CY22.
Bell Potter has a buy rating and $2.00 price target on Nickel Industries’ shares.