Technology

Apple reportedly buying long-term supplies of cobalt directly from miners

Apple reportedly buying long-term supplies of cobalt directly from miners”

Apple is one of the world's largest end users of cobalt for the batteries in its gadgets, but until now it has left the business of buying the metal to the companies that make its batteries.

Bloomberg reported Wednesday that Apple (NASDAQ: AAPL) is in talks to buy long-term supplies of cobalt for iPhone batteries directly from miners.

Further complicating matters, Apple and Samsung have both been put under scrutiny for procuring cobalt from mines where child labor was found to have been used.

Apple is seeking contracts to secure several thousand metric tonnes of cobalt a year for five years or longer, according to one of the people, declining to be named as the discussions are confidential.

Industry sources said Apple had spoken to miners such as Glencore, a top producer, which said late last year it would produce around 39,000 tonnes of cobalt this year. 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.

Apple declined to comment on the report.

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.

According to metal distributor Darton Commodities, about 50,000 tons of cobalt was used in batteries and electric cars a year ago.

Apple chief executive Tim Cook said earlier this month that the company's active installed base reached 1.3 billion devices worldwide as of January, up 30 per cent from two years ago.

BMW is also close to securing a 10-year supply deal, the carmaker's head of procurement told German daily FAZ in early February.

Cobalt is now on the market for over $80,000 per metric ton and has more than doubled in price since 2016. Apple already has the purchasing clout to ensure prioritized supplies of components, as has been seen with Sony camera sensors, but the company is not immune to shortages.

War-torn countries like the Democratic Republic of the Congo have vast cobalt reserves and 20 percent of cobalt from that country is mined by hand and by children in some cases, Amnesty International said.



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