If your portfolio is lacking mining exposure and you want to change that, then the two ASX 200 mining shares listed below could be worthy candidates.

Here’s why these mining shares are rated highly by analysts:

Allkem Ltd (ASX: AKE)

The first ASX 200 mining share to look at is Allkem. It is a top five global lithium miner with a collection of world class operations including Olaroz, Mt Cattlin, and the Sal de Vida brine project.

Unlike the many explorers and developers on the Australian share market, Allkem has been producing lithium for some time. For example, during the fourth quarter it expects to ship 3,500 tonnes of lithium carbonate and 38,000 dry metric tonnes of spodumene at over US$40,000 per tonne and US$5,000 per tonne, respectively.

Morgans is bullish on Allkem. This is due to the broker’s positive outlook on lithium prices and Allkem’s bold production growth plans.

We maintain our ADD rating given the strong growth outlook for the company. AKE’s diverse products and geographical mix adds opportunities to capture value as the market evolves. There is further potential upside that are not in our numbers such as Olaroz stage 3 and/or another lithium hydroxide plant. Should the lithium market continue to remain strong AKE still has a large amount of untapped growth potential.

The broker currently has an add rating and $16.38 price target on its shares.

Iluka Resources Limited (ASX: ILU)

Another ASX 200 mining share that could be in the buy zone is Iluka. It is a mineral sands and rare earths producer with a number of operations across South Australia, Western Australia, and Sierra Leone.

Analysts at Goldman Sachs are very positive on the company. This is due to its attractive valuation, the favourable outlook for mineral sands, and its exposure to rare earths.

Goldman commented:

We are Buy rated on mineral sands/rare earth producer ILU (on CL) on attractive valuation and compelling Zircon and TiO2 price upside and Rare Earth growth potential.

We think ILU is undervalued (on c. 6x EBITDA NTM) vs. key rare earth (c. 15x) and mineral sands/pigment (c. 6x) industry peers. Positive on project pipeline and forecast >40% production growth in mineral sands volumes, c.18ktpa of Rare Earths, and a >50% increase in EBITDA over the next 5 yrs to 2026 The Zircon and TiO2 feedstock markets entered a 3-yr supply side driven deficit in 2021, and we see ongoing upside risk to prices in 2022

The broker currently has a conviction buy rating and $13.80 price target on Iluka’s shares.

The post Here’s why analysts rate these ASX 200 mining shares as buys appeared first on The Motley Fool Australia.

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More reading

• Could ASX lithium shares be set for a boost?
• Iluka share price lifts off on rare earths refinery progress
• Why has the Allkem share price tumbled 30% from its May all-time high?
• Leading brokers name 3 ASX shares to buy today
• Top broker names 4 ASX lithium stocks to buy now

Motley Fool contributor James Mickleboro has positions in Allkem Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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