Apple buys cobalt to secure long-term battery supplies

Allan Goodman
February 22, 2018

The challenge is that with the growth of electric and hybrid vehicles gobbling ever larger amounts of the metal, Cupertino fears a shortage that could hurt its sales figures.

Apple is believed to be in talks to buy long-term supplies of cobalt directly from miners.

It can be recalled that in March 2017, Apple announced that it would stop buying hand-mined cobalt in the Congo following reports of child labor and unsafe work conditions.

A source has told Bloomberg Apple is seeking contracts to buy several thousand metric tons of cobalt over a five-year period.

Declining to be named as the discussions are confidential, the source said that the firm is in first discussions on cobalt deals with miners were more than a year ago, and it may end up deciding not to go ahead with any deal, another person said. Smartphones use only eight grams of cobalt, while electric vehicle batteries require over 8,000 grams.

Apple's business foresight will always give it an advantage in the industry, with the company reportedly being in talks in purchasing Cobalt directly from miners. Cobalt's conducive properties made it an attractive component for rechargeable batteries.

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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. Apple says it is working to end child labour in cobalt mines, and it has partnered with a number of NGOs to focus on the DRC particularly.

Other companies such as Samsung, BMW and VW are also racing to secure supplies, according to the report.

Two-thirds of supplies come from the Democratic Republic of Congo, where there has never been a peaceful transition of power and child labour is still used in parts of the mining industry.

The price of cobalt has more than tripled in the past 18 months to trade at more than US$80,000 a metric tonne.

The London Metal Exchange (LME), the world's biggest market for industrial metals, has also stepped up efforts to make sure that cobalt mined by child labour doesn't trade on the exchange, following several reports indicating that minors are being exploited to extract the coveted mineral. These players would not leave any stone unturned to secure the supply of cobalt in the future as well.

Apple has increased its engagement with cobalt miners in recent years due to scrutiny from global human rights organizations.

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