Apple is looking for long-term cobalt suppliers before electric cars take off

Alan Olson
February 22, 2018

Apple is in talks to buy cobalt directly from miners to help shield it from any shortages sparked by the boom in electric cars, according to a report from Bloomberg.

DRC's near-monopoly position in cobalt mining has been fraught with ethical and economic issues, most notably child labor in the mines.

End-users normally leave the supply of such components to their battery suppliers, but Apple is clearly concerned about a possible future shortage of cobalt. Apple is one of the largest end users of cobalt in the world with the metal being a key ingredient in the batteries used in most of Apple devices. Bloomberg reports that smartphone batteries use around eight grams of refined cobalt, but a battery for an electric auto needs more than a thousand times that amount.

Cobalt prices have skyrocketed of late due to an expected growth in demand for electric vehicles powered by lithium-ion batteries. 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.

Apple may end up deciding not to go ahead with a deal, the report said, citing another source.

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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.

Cobalt prices went ballistic past year, with the metal quoted on the London Metal Exchange ending 2017 at $75,500 per tonne, a 129 percent annual surge sparked by intensifying supply fears and an expected demand spike from battery markets.

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

About 62 per cent of the world's cobalt supply is now controlled by China, and more than 90 per cent of that comes from Congo, according to metals consultancy CRU. In the past, the company is reported to have unwittingly bought batteries containing cobalt mined using child labor. Although Glencore - a name which may be familiar to you - is the biggest supplier, two-thirds of all cobalt supplies actually come from the Democratic Republic of Congo.

Other reports by GlobalViralNews

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