Apple may buy cobalt direct from mining companies, protecting both parties

Lena Tucker
February 22, 2018

Apple is rumoured to be buying long-term supplies of cobalt directly from miners for the first time, according to Bloomberg, in a bid to secure long-term supplies - possibly for an electric auto project.

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.

Citing "people familiar with the matter", the report said the Cupertino giant is looking into buying more cobalt to ensure it will have enough of the key battery ingredient, in a move that sounds like it's scared its all going to run out. While smartphones use around eight grammes of refined cobalt, the battery for an electric vehicle requires more than 1,000 times more. Auto giants like BMW and Volkswagen are also searching for multiyear deals to ensure they also have enough cobalt to meet targets in electric vehicle production.

Cobalt demand from the electric vehicles industry is also forecast to grow from to 95,000 tonnes by 2026 from 12,000 tonnes past year, according to consultancy CRU.

But due to the exponentially growing demand for the metal, prices per metric ton of cobalt have more than increased threefold from between September 2016 and January 2018 to more than $70,000.

Bloomberg says that talks first began more than a year ago, and Apple is seeking a long-term deal - though nothing is yet certain.

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. Relying on anonymous sources, Bloomberg reports that Apple is in talks to buy long-term supplies of the metal. Glencore, the mining multinational that operates in about 50 countries, has named Apple as one of the main customers it was talking to about cobalt, according to Bloomberg.

China, where most of Apple's devices are manufactured, is not only the world's biggest market for smartphones and electric cars, but also the largest consumer of cobalt around the globe. Much of that bumper 44% dividend payout is due to the spike in cobalt, which saw a 108% increase on the average price, from $12 a pound to around $25 a pound previous year alone.

Plug-in electric vehicles need the rare mineral for their lithium-ion batteries, as well.

Other reports by AllAboutTopnews

Discuss This Article