S&P/ASX 200 Index (ASX: XJO) mining shares have struggled recently, and Iluka Resources Limited (ASX: ILU) hasn't dodged its sector's carnage.
The mineral sands producer's stock is currently trading at $9.59. That's 25% lower than the record high it reached in April. Meanwhile, the S&P/ASX 200 Materials Index (ASX: XMJ) is down 10% year to date.
But First Sentier senior portfolio manager Tim Canham appears bullish on the Iluka share price. The fundie reportedly believes the materials share is undervalued and ready to benefit from a lack of supply.
Let's take a closer look at what the expert has tipped will drive the ASX 200 mining share higher.
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ASX 200 mining share tipped to take off
Iluka is an ASX 200 mineral sands miner developing and operating projects across Australia. From its mineral sands, Iluka produces minerals such as zircon, titanium, and rare-earth elements.
Canham believes there's plenty to be hopeful about when it comes to mineral sands. The fundie told the Australian Financial Review:
[T]here are headwinds from global recession fears and Chinese housing issues, but the fundamental lack of supply in mineral sands products is very real.
Canham also thinks Iluka's push to construct a rare earth refinery in Western Australia is "misunderstood by the market and undervalued", continuing:
As a manufacturing destination, [Western Australia] looks attractive with some of the lowest gas prices in the world.
Iluka has doubled down on its Australian business recently. It spun out its West African mineral sands leg into Sierra Rutile Holdings Limited (ASX: SRX) earlier this week.
And Canham isn't the only expert expecting big things from the ASX 200 mining share.
Goldman Sachs has slapped Iluka shares with a $13.80 price target and a buy rating, my Fool colleague James reports. That implies a potential 44% upside.
