Apple in talks to buy cobalt for batteries directly from miners
Feb 22 2018
A newreport suggests that to prevent any shortage from hurting the bottom line, Apple is now in talks to buy cobalt directly from miners.
Apple Inc is talking to major cobalt producers to secure supplies of the material vital for the lithium-ion rechargeable batteries that power its mobile phones, three cobalt industry sources said.
Further, the report noted that during 2017, lithium-ion batteries deployed in the portable consumer electronics products accounted for roughly 72% of total cobalt consumed in the lithium-ion batteries. Cobalt is a key component of smartphones batteries, and it's estimated that each smartphone uses around eight grams of refined cobalt.
Apple is seeking contracts to secure several thousand metric tons of cobalt a year for five years or longer, according to one of the people, declining to be named as the discussions are confidential.
If Apple does end up buying cobalt directly, it will be in competition with auto manufacturers and battery makers in locking up supplies of the raw material. Companies such as BMW, Volkswagen and Samsung are also looking to lock up multi-year contracts for supplies of the metal to produce electric vehicles.
Shares in Apple vaulted $1.65, or 1%, to $173.50, as the clock approached noon Wednesday. The price of cobalt has tripled in the last 18 months to $80,000 per metric ton.
Bloomberg says that talks first began more than a year ago, and Apple is seeking a long-term deal - though nothing is yet certain.
BMW is also close to securing a 10-year supply deal, the carmaker's head of procurement told German daily FAZ in early February.
In 2014, Apple first started mapping the cobalt supply chain, according to a 2016 Supplier Responsibility report.
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.
One issue with the cobalt supply is proportion.
Rights group Amnesty International said past year about a fifth of Congo's cobalt production is mined by hand by informal miners including children, often in risky conditions.
Apple has increased its engagement with cobalt miners in recent years due to scrutiny from global human rights organizations.