ASX mining shares have been the worst hit by the war in Iran.
The ASX 200 materials sector, which is dominated by mining stocks, has slumped 19% while energy shares have rocketed 17%.
It's likely that some investors have sold their ASX mining shares to preserve tremendous recent capital gains.
Before Israel and the US bombed Iran on 28 February, the materials sector was up 19% in 2026 alone.
Even more astounding, ASX 200 materials shares had lifted 56% over the preceding 12 months.
Image source: Getty Images
How is the war impacting ASX mining shares?
The war has created a fuel crisis, with the Brent Crude oil price tearing 42% higher in just 30 days.
Gas prices have skyrocketed, too.
European gas prices are up 83%, UK gas is up 91%, and German gas is up 77% over 30 days.
Rising fuel costs are a headwind for mining companies, as well as most other industrial businesses.
Higher operating costs will be partly offset by strong commodity prices after a very strong run last year.
But the more pressing concern is the potential for constrained fuel supply if the war drags on.
This would impact the miners' production, exports, and earnings.
Of course, this may not materialise, with US President Donald Trump repeatedly indicating that the war will be over soon.
But when there's fear in the market, investors often act on emotion, and we're likely seeing a bit of that today.
The longer-term view is that Australia is at the start of a new mining boom that will be different from the last.
Experts say there are 5 key drivers behind a new commodities supercycle that became apparent last year.
The Iran conflict won't change that.
In a new article, David Rumbens, a partner at Deloitte Access Economics, says:
Beyond the headline disruption, the latest data paints a positive picture of Australian mining output, investment and exploration.
Mining was the fastest-growing industry in the December quarter, becoming an increasingly important driver of Australia's economic growth.
Data from the Australian Bureau of Statistics (ABS) National Accounts show that mining gross value added grew by 3.7% over the year to December 2025 – well above GDP growth of 2.6% — marking the first time in nearly two years that the sector has outpaced the broader economy.
Miners ramping up exploration spending
Rumbens said mining exploration spending is growing, with gold expenditure surging to a record high in the December quarter.
He said total new-deposit spending across all commodities grew 7% year over year.
The lift in exploration suggests the industry is investing to sustain its production base as existing reserves deplete.
While exploration and output are expanding, Rumbens said investment had not yet followed to the same extent.
He said capital expenditure has stabilised at about 1.9% of GDP per annum over the past six years.
That's well down on the peak of 6.2% during the height of the last mining boom.
Rumbens said Deloitte's Tracking the Trends 2026 highlights the growing role of technology in maintaining mining's competitive edge.
The report notes that the exponential growth of AI is presenting transformative opportunities to elevate operational resilience and competitiveness by boosting productivity and revolutionising mineral discovery.
In exploration, it identifies that the starting point for future discoveries could be data, with firms that digitise and integrate diverse sources best positioned to leverage AI for faster, smarter discoveries.
Rumbens said export revenues are expected to hold above $370 billion over the next two years, with volumes near historical highs.
How have the major ASX mining shares fared since the war began?
The market's largest ASX mining share has fallen significantly since the conflict in Iran began.
The BHP Group Ltd (ASX: BHP) share price has fallen 17% to $48.46 today.
Last week, UBS reiterated its hold rating on BHP shares with a 12-month price target of $52.
Morgan Stanley reiterated its buy rating with a target of $56.
The Rio Tinto Ltd (ASX: RIO) share price has fallen 11% since 28 February to $148.74 on Tuesday.
Last week, Morgan Stanley reiterated its hold rating on Rio Tinto shares with a $146 target.
The market's largest ASX 200 gold mining share, Northern Star Resources Ltd (ASX: NST), has fallen 42% since 28 February to $17.63.
A second guidance downgrade from the miner contributed to its decline this month.
Last week, Ord Minnett reiterated its buy rating on Northern Star shares.
However, the broker slashed its price target from $29.70 to $23.70.
JP Morgan downgraded the ASX 200 gold mining share to a hold rating with a $24 target.
The largest ASX 200 lithium mining share, PLS Group Ltd (ASX: PLS), has fallen 12% to $4.54.
Yesterday, Ord Minnett reiterated its buy rating with a slightly improved 12-month price target of $5.55.
Last week, UBS maintained its hold rating on PLS shares with a $4.95 target.
