Apple in talks to buy cobalt for batteries directly from miners

by Lawrence Cooper February 22, 2018, 0:37
Apple in talks to buy cobalt for batteries directly from miners

"We're not sure whether (Apple) want to buy the cobalt for the battery makers that supply them or whether they are planning to stand behind the cobalt supply chain as guarantors", a cobalt industry source said.

Electronics and auto makers are racing to lock in supply agreements for cobalt amid fears of shortage. Apple is now competing against global carmakers to acquire enough cobalt for their future products.

Although Bloomberg has cited an anonymous source, the news of Apple looking to buy cobalt for their batteries makes a lot of logical sense.

The Bloomberg report said Apple was not immediately available for comment outside regular business hours. By securing a deal directly with miners, Apple can ensure that it can continue the steady production of iPhone, iPad, and iPod devices. Other companies like BMW, Volkswagen, and Samsung are also aiming to secure multi-year contracts for supplies of the raw material to produce electric vehicles.

The automobile sector has certainly pushed up the demand for cobalt, but it has not peaked yet, according to Darton Commodities, which specializes in the sale of cobalt.

So far, no major deals have been announced, although BMW's head of procurement told German daily newspaper Frankfurter Allgemeine Zeitung in early February that it was close to securing a 10-year supply deal.

Apple and other major cobalt consumers are scurrying to access cobalt resources that are now limited-not because of the amount of ore available, but because mining companies can't get it out of the ground fast enough to keep up with everyday demand of rechargeable batteries. On average, smartphones use about eight grams of cobalt for each battery, but the battery for an electric vehicle requires over 1,000 times more. Apple has around 1.3 billion existing devices, while Apple Chief Executive Officer Tim Cook has been bullish about the prospects for electric vehicles.

In recent years, Apple has stepped up its engagement with cobalt suppliers after the origin of the metal in its supply chain came under scrutiny from human rights groups. In a report in early 2016, Amnesty International alleged that Apple and Samsung Electronics Co.'s Chinese suppliers were buying cobalt from mines that rely on child labor.

The cobalt Apple uses at the moment comes from Congo and it does get a lost of criticism because the labour used in such mines suffer from appalling conditions and use child labour.

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