If you're looking for exposure to the Australian mining sector, then you may want to check out the two ASX 200 mining shares listed below.
Here's why they have been named as buys:
BHP Group Ltd (ASX: BHP)
The first ASX 200 mining share to look at is mining giant BHP.
The Big Australian is one of the world's largest miners and the owner of a world class portfolio of projects across a number of commodities and geographies.
Macquarie is a fan of the company. This is due to its belief that BHP is well-placed to generate solid free cash flow in the coming years. Particularly given strong iron ore, coking coal, and copper prices.
Macquarie has an outperform rating and $52.00 price target on BHP's shares.
South32 Ltd (ASX: S32)
Another ASX 200 mining share to consider buying is South32. It is a diversified mining and metals company that produces a range of commodities including aluminium, copper, manganese, and nickel.
Analysts at Citi are positive on the company. This is due partly to its strong performance in FY 2023 and attractive valuation. It said:
1H FY23 profit of US$560m was better than expected. Importantly, FY23 prodn and cost guidance was maintained. FY24 prodn guidance points to modestly higher output in FY24. […] S32 now trades at 0.94x NPV vs RIO at 1.0x and FMG 1.3x. We raise our TP to $5.05 and stay Buy rated. We believe S32 has not yet run to full valuation levels trading on FY24E EV/EBITDA of 4x vs peers at >5x.
Citi currently has a buy rating and $5.05 price target on the miner's shares. It also expects dividend yields no lower than 6.5% for the next three years.
