Morgans names the best ASX mining shares to buy in August

Jun 23, 2023

These mining shares are top picks for the team at Morgans this month.

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Are you in the market for some ASX mining shares this month? If you are, then it could be worth hearing what Morgans is saying about the two listed below.

Here’s why it has these ASX mining shares on its best ideas list:

The first ASX mining share that Morgans rates as a buy is Mineral Resources. It is an energy, iron ore, and lithium-focused mining and mining services company.

Morgans is positive on the company due to its significant organic growth potential, which it believes will offset commodity price volatility. It also sees Mineral Resources as well-placed to benefit from China’s reopening. The broker said:

MIN is a founder-led business and top tier miner and crusher that has grown consistently despite barely issuing a share over the last decade. Also helping our investment view is that MIN’s diversification leaves it far more capable of tolerating volatility in lithium markets than its peers in the sector. We see MIN’s lithium / iron ore market exposures as an ideal combination to benefit from the China re-opening increase in demand during 1H’CY23. We also see MIN as well placed to grow into its valuation, even if we see unexpected metal price volatility, given the magnitude of organic growth in the pipeline.

Morgans has an add rating and a $86 price target on its shares.

Another ASX mining share that could be a buy according to Morgans is South32. It is a diversified mining company with a focus on commodities that are integral to the decarbonisation megatrend.

Morgans likes the company due to its portfolio transformation and earnings-linked dividend policy. It explains:

S32 has transformed its portfolio by divesting South African thermal coal and acquiring an interest in Chile copper, substantially boosting group earnings quality, as well as S32’s risk and ESG profile. Unlike its peers amongst ASX-listed large-cap miners, S32 is not exposed to iron ore. Instead offering a highly diversified portfolio of base metals and metallurgical coal (with most of these metals enjoying solid price strength). We see attractive long-term value potential in S32 from de-risking of its growth portfolio, the potential for further portfolio changes, and an earnings-linked dividend policy.

The broker has an add rating and a $5.15 price target on South32’s shares. It also expects a 4.1% dividend yield in FY 2024.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. 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.