Apple Reportedly In Talks To Buy Cobalt Directly From Miners
- Author: Regina Walsh Feb 22, 2018,
Feb 22, 2018, 0:43
Apple has been trying to end child labor in mines that produce cobalt for the company and said it is working with non-government entities (NGOs) in the country to stop it. Although Bloomberg has cited an anonymous source, the news of Apple looking to buy cobalt for their batteries makes a lot of logical sense. Reports indicate that now about a quarter of all cobalt mined globally is used in smartphones and the demand for cobalt is expected to boom by 2030.
Apple is said to be securing contracts for the supply of several thousand metric tons of cobalt each year for five years or more.
Cobalt, the essential ingredient in the production of lithium-ion batteries for telephone and other gadgets, has seen its prices skyrocketed of late due to an expected growth in demand for electric vehicles powered by lithium-ion batteries. 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.
Negotiations are said to be in a preliminary stage, which means Apple may end up deciding not to go ahead with a deal, the article says. On it's part, Apple declined to comment on the issue.
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. Over the past eighteen months, the price of cobalt has tripled to more than $80,000 a metric ton.
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In 2014, Apple first started mapping the cobalt supply chain, according to a 2016 Supplier Responsibility report. The country's cobalt imports from the Congo reached US$1.2 billion in the first nine months of a year ago.
Over the years, the Cupertino, California-based company has faced the heat of human rights groups, which allege that Apple has kept its ethics at stake by sourcing supply from the mines involved in child labor.
More than 60 percent of cobalt is found in the Democratic Republic of Congo (DRC) in Africa, but more than half of the world's refined company chemicals that are used to build the batteries comes from China, according to a separate Bloomberg article from October.
Plug-in electric vehicles need the rare mineral for their lithium-ion batteries, as well.