The S&P/ASX 300 Metal & Mining Index (ASX: XMM) is down 4.4% on Thursday, while the S&P/ASX 300 Index (ASX: XKO) is down 1.6%.
ASX mining shares have been the worst hit by the war in Iran, with the Metal & Mining Index falling 17.4% vs. a 7.7% drop for the ASX 300.
Fears of rising fuel costs and constrained supply are a major headwind for mining operations, potentially threatening production.
Additionally, ASX mining shares have been on a tear for 12 months, and the war may be prompting some investors to take profits now.
A global fuel crisis would hit almost every market sector, so an ongoing conflict in Iran could drag the whole market lower over time.
Kylie Purcell, Senior Markets Analyst for online investment platform Stake, said:
If the Strait of Hormuz stays closed and oil prices march upwards, we could see a sharper, sustained fall in global and Australian shares.
Meantime, here are three ASX mining shares with buy, hold, and sell ratings today.
Image source: Getty Images
Meeka Metals Ltd (ASX: MEK)
The Meeka Metals share price is 16 cents on Thursday, down 4.7% today but up 15.7% over the past year.
This week, Morgans maintained its buy rating on the ASX gold mining share with a 12-month price target of 39 cents.
The broker said:
MEK announced an expansion to 800ktpa (equivalent ounce basis) via ore sorting, requiring modest capex of A$6m with commissioning scheduled for Q1FY27. Ore sorting effectively near doubles Andy Well underground head grade, lifting our annual production forecasts by an average of 7% from FY27 onwards.
We maintain our BUY rating and A$0.39ps price target, acknowledging near-term production softness may weigh on the 3Q result ahead of an anticipated step-change in output in 4Q.
The ASX gold mining share will join the ASX 300 Index at the next rebalance, effective next Monday.
Lynas Rare Earths (ASX: LYC)
The Lynas Rare Earths share price is $20.04, down 1.7% today but up 162% over the past year.
This week, Bell Potter upgraded its rating on this ASX rare earths mining share from sell to hold.
The broker also significantly increased its 12-month price target from $11.60 to $19 per share.
The rating change followed the miner's announcement that it has extended its Japan Australia Rare Earths offtake agreement to 2038.
Bell Potter said this effectively guaranteed revenue of around $775 million at the current exchange rate.
Today, Lynas announced it had produced its first samarium oxide at the Malaysia site.
Lunnon Metals Ltd (ASX: LM8)
The Lunnon Metals share price is 34 cents, down 9.5% today but up 60% over the past 12 months.
On The Bull this week, Nathan Lodge from Securities Vault put a sell rating on this ASX nickel mining share.
Lodge explained:
For companies, such as Lunnon Metals, exploration success isn't sufficient to drive value if the underlying commodity price environment remains weak.
The company's strategy centres on exploring and advancing sulphide nickel deposits in a region historically known for high grade discoveries and established mining infrastructure.
However, global nickel prices have been under sustained pressure as supply from Indonesia has increased rapidly, creating a structural oversupply in the market.
Lunnon Metals gave a presentation at the Euroz Hartleys Conference yesterday.
