Lithium demand has been growing very strongly in recent years due to the decarbonisation megatrend.
That's because the white metal is an essential component in the production of lithium-ion batteries, which are used to store energy in a wide range of applications. This includes electric vehicles, grid-level energy storage systems, and portable electronics.
And with the shift towards electrification and renewable energy only getting started, demand for lithium is expected to continue to increase rapidly in the next decade.
So, with supply struggling to keep up with demand, at least for now, the price of the battery-making ingredient has been trading at sky high levels in recent years. This means that ASX 200 lithium shares that are already mining the metal are printing money right now.
In light of this strong cash flow generation, a couple of ASX 200 lithium shares have been tipped to reward their shareholders handsomely with dividends in 2023.
2 ASX 200 lithium shares with 7% dividend yields
The first ASX 200 lithium share that analysts are expecting to pay a big dividend in FY 2023 is Mineral Resources Ltd (ASX: MIN).
According to a note out of Morgan Stanley, its analysts are expecting a $6.75 per share fully franked dividend this year. Based on the current Mineral Resources share price of $85.89, this will mean a 7.9% dividend yield.
Another lithium share that has been tipped to provide investors with a sizeable dividend yield in FY 2023 is Pilbara Minerals Ltd (ASX: PLS). This follows the announcement of its capital management framework late last year.
The team at Macquarie is expecting the lithium giant to pay shareholders a 34 cents per share dividend this year. Based on the current Pilbara Minerals share price of $3.93, this will mean an even larger 8.7% dividend yield from the ASX 200 lithium share in 2023.
All in all, this appears to demonstrate that the lithium industry could be a great place for income investors to look for big dividend yields in the near term.
