Invested in ASX mining shares? Expert recommends diversity over iron ore concentration

ASX mining shares closed higher on Thursday, with the S&P/ASX 300 Metal & Mining Index (ASX: XMM) lifting 2.56%.

The index has risen 27% over the year to date compared to a 4.5% bump for the S&P/ASX 300 Index (ASX: XKO).

ASX mining share valuations are being supported by rising commodity prices for many metals and minerals amid the gold price boom and green energy transition.

Check out what's happened this year to these commodity prices.

Star commodities of 2025

By comparison, the iron ore price has risen 1%, but remains relatively healthy at about US$104 per tonne.

Expert recommends 'diversified options'

The broad-based rise in commodity values suggests the best type of ASX mining shares to be invested in right now are diversified ones.

On The Bull this week, Jed Richards from Shaw and Partners discussed his sell rating on Rio Tinto Ltd (ASX: RIO) shares.

Rio Tinto is certainly a diversified miner, producing iron ore, copper, aluminium (produced from alumina, which is refined from bauxite), diamonds, industrial minerals such as borates, titanium dioxide, and salt; the critical mineral, scandium; ferrous metallics, and lithium.

However, Rio Tinto remains an ASX 200 iron ore giant.

The company's revenue remains heavily weighted to iron ore. The core steel ingredient made up just under 43% of Rio Tinto's segmental revenue and 54% of its earnings before interest, taxes, depreciation, and amortisation (EBITDA) for 1H FY25.

Richards prefers more diversified miners in the current climate, commenting:

This global miner is heavily exposed to iron ore, and the stock is currently trading near elevated levels, in our view.

With limited diversification compared to peers, we prefer BHP Group Ltd (ASX: BHP) for broader resource exposure and stronger long term positioning.

With this in mind, Richards has a sell rating on Rio Tinto shares, suggesting investors cash in on the miner's 23% gain since 30 June.

Locking in gains and reallocating to more diversified options makes sense in the current environment.

The shares have risen from a closing price of $107.13 on June 30 to trade at $131.70 on November 13.

Latest ratings on diversified ASX mining shares

There are four ASX 200 large-cap diversified mining shares on the ASX.

Here are some of the latest ratings on them.

BHP Group Ltd (ASX: BHP)

The consensus rating among 20 brokers covering BHP shares on the CommSec trading platform is a hold.

Macquarie has a neutral rating on BHP shares with a 12-month target price of $44.

In a recent note, the broker said:

We recently switched preference to RIO (RIO AU/RIO LN; Neutral) from BHP on a better catalyst backdrop into CY26 and the RIO Capital Markets Day (CMD).

Rio Tinto Ltd (ASX: RIO)

The consensus rating among 15 analysts covering Rio Tinto shares on CommSec is a moderate buy.

Macquarie has a neutral rating on Rio Tinto shares with a 12-month target price of $124. 

South32 Ltd (ASX: S32)

The consensus rating among 16 brokers covering South32 shares on CommSec is a moderate buy.

Macquarie has an underperform rating on South32 shares with a target price of $3.20.

On The Bull last week, Dylan Evans from Catapult Wealth revealed a buy rating on South32 shares.

Evans said:

The company's earnings are volatile, but the commodity mix provides diversification across price cycles. S32's long life mine assets are high quality and low on the cost curve. Overall, we're attracted to the company's commodity mix during the energy transition and electrification.

Mineral Resources Ltd (ASX: MIN)

The consensus rating among 15 analysts covering Mineral Resources shares on CommSec is a hold.

Macquarie has an underperform rating on Mineral Resources shares but raised its price target to $47 earlier this month.

In its latest note, the broker said:

We raise our target price 24% to A$47.00 to reflect Mt Marion and Wodgina equity sell-down and improved near-term earnings outlook.