If you're wanting to invest in the mining sector, then you may want to check out the two ASX 200 mining shares listed below.
Both have been named as buys by brokers and are tipped to generate big returns. Here's what brokers are saying about them:
Allkem Ltd (ASX: AKE)
Bell Potter says that this lithium giant could be an ASX 200 mining share to buy right now.
Its analysts believe that the proposed merger with Livent Corp (NYSE: LTHM) could lead to its shares trading on higher multiples. The broker explains:
AKE is now in-play; we think it is likely the LTHM merger will proceed and are not confident that an interloper will emerge. On a stand-alone basis the company has a strong production and earnings growth profile into what we expect to be an exceptionally strong market for lithium. Combining with LTHM and the NYSE listing could see an earnings multiple uplift. AKE is trading at a slight discount to the implied deal value, which we expect will close if deal certainty improves.
Bell Potter has a buy rating and $19.20 price target on Allkem's shares.
Rio Tinto Ltd (ASX: RIO)
Over at Goldman Sachs, its analysts believe that Rio Tinto is an ASX 200 mining share to buy.
Rio Tinto is one of the world's largest miners and the owner of a world class portfolio of properties across multiple commodities such as aluminium, copper, iron ore, and lithium.
Goldman Sachs is a fan of the company due to its production growth outlook and attractive valuation. It commented:
We are Buy rated (on CL) on RIO due to: (1) compelling relative valuation vs. peers, (2) Strong FCF and dividend yield with our bullish view on iron ore, aluminium and copper prices, (3) Strong production growth in 2023 & 2024, (4) Pilbara turnaround (~50% of group NAV), (5) Compelling high margin low emission aluminium exposure.
The broker currently has a buy rating and $136.20 price target on its shares.
