If you're looking for ASX lithium shares that offer a dividend, you may be in for a bit of a search.
The prices of lithium have been on the rise lately as the demand for electric vehicles has skyrocketed. This has caused the shares of many ASX lithium companies to soar. But for many shareholders, this hasn't translated into dividends quite yet.
However, this could just be a matter of time. Lithium continues to be in high demand. The spodumene concentrate price experienced an incredible 46% rally in January alone. Understandably, many companies are reinvesting the bulk of their spare cash in attempting to meet the insatiable demand.
In saying that, if you're looking for a piece of the action and some passive income, we have pulled together a list of ASX lithium shares that currently offer dividends.
Electrifying your portfolio with extra ASX lithium shares juice
Mineral Resources Limited (ASX: MIN)
The team at Mineral Resources has been keeping busy with their Mt Marion and Wodgina lithium projects.
They are one of Australia's largest miners, and with a market capitalisation of more than $11 billion, they're also one of the ASX lithium shares with a dividend.
At the moment, Mineral Resources is offering up a dividend yield of 4.7%. This yield has been boosted by a period of high margin prices in its iron ore business.
Wesfarmers Ltd (ASX: WES)
Wesfarmers is one of the ASX's most diversified companies. They operate in a range of industries, including retail, coal mining, and energy generation.
It might be a bit of a stretch to label this conglomerate an ASX lithium share. However, it offers exposure to the sector while also providing a reasonable dividend.
Through its acquisition of the formerly listed Kidman Resources, which joined forces with Wesfarmers' jointly-owned Covalent Lithium, the conglomerate's lithium credentials are valid.
At present, the company offers investors a dividend yield of 3.3%.
Rio Tinto Limited (ASX: RIO)
Rio Tinto is one of the biggest companies on the ASX, boasting a massive $171 billion market cap. The company owns and operates a range of assets across the globe, including coal, copper, diamond, gold, and iron ore mines.
In recent years, Rio Tinto has been making a concerted effort to increase its exposure to lithium. For example, the miner entered an agreement to acquire the Rincon Lithium project in Argentina during the fourth quarter for US$825 million.
Although Rio is yet to record any lithium production, the company is now exposed to the sector. In addition, shareholders can bask in the dividend fruits of this diversified miner. Currently, the company has a market-beating yield of 8% — the biggest payer on this list.
One ASX lithium share to watch for future dividends
Last, but not least, is an ASX lithium share that currently does not pay dividends but might in the future.
Allkem Ltd (ASX: AKE) is the combination of two lithium heavyweights, Orocobre and Galaxy Resources. Today, they operate under one umbrella. In its December quarterly activities report, the company revealed 230,065 dry metric tonnes of spodumene concentrate production in 2021.
In talking with The Australian Financial Review, Allkem boss Martin Perez de Solay explained the complexity of dividend payments. Because the chemical company is situated in Argentina, it cannot distribute a dividend without Argentina's approval.
However, Perez de Solay noted that the government has now stipulated up to 20% of proceeds can be kept offshore for future dividends payments. While a dividend isn't guaranteed, this opens the door to Allkem becoming another dividend-paying ASX lithium share.
