March 18, 2018

Apple in talks with miners to secure cobalt supplies

22 February 2018, 12:39 | Rudolph Thomas

Apple has said it will only take cobalt from the Democratic Republic of Congo if child labour is not involvedREUTERS

Apple has said it will only take cobalt from the Democratic Republic of Congo if child labour is not involved

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.

According to Darton Commodities, cobalt use in electric vehicles and other lithium-ion battery applications was at 48,900 tonnes in 2016, and raised to 55,400 tonnes in 2017. Smartphones use only eight grams of cobalt, while electric auto batteries require over 8,000 grams. Apple has around 1.3 billion existing devices, while Apple Chief Executive Officer Tim Cook has been bullish about the prospects for electric vehicles.

Now it seems that Apple is concerned that the prices of Cobalt are getting out of hand and it is seeking contracts to buy several thousand metric tons of cobalt for five years or longer.

The move means Apple will find itself in competition with carmakers and battery producers to lock up cobalt supplies.

Apple is competing with the likes of BMW AG, Volkswagen AG, and Samsung SDI sign multi-year contracts with cobalt miners.

BMW is also close to securing a 10-year supply deal, the carmaker's head of procurement told German daily FAZ in early February. The talks began over a year ago but it's not certain that Apple will take a deal in the end.

Apple didn't immediately respond to a request for comment. 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. 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. Cobalt is also mined in China, Russia, Canada and Australia, but we guess that would be more pricey.

One issue with the cobalt supply is proportion.

Cobalt has been at the center of several heated debates over the years as the largest supplier of cobalt is the Republic of Congo, where even children work as miners.

Apple said last March it would stop buying cobalt mined by hand in the Congo following reports of child labor and unsafe work conditions.

Rights group Amnesty International said previous year about a fifth of Congo's cobalt production is mined by hand by informal miners including children, often in unsafe conditions.

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