Apple Could Source Key Battery Components Directly From Miners
- Author: Valerie Cook Feb 22, 2018,
Feb 22, 2018, 0:45
The challenge is that with the growth of electric and hybrid vehicles gobbling ever larger amounts of the metal, Cupertino fears a shortage that could hurt its sales figures.
Tech giant Apple Inc (NASDAQ: AAPL) is said to be in talks to buy long-term supplies of cobalt directly from miners as a way to ensure sufficient supply of the metal, an essential ingredient in the batteries that power its iPhone. Apple is now competing against global carmakers to acquire enough cobalt for their future products.
The sources in the report claim that Apple is looking to sign contracts to secure several thousand metric tons of cobalt a year, for up to five years, or maybe even longer.
Electric vehicle companies such as BMW and Volkswagen have been rushing to woo and procure long-term contracts with cobalt producers, according to Bloomberg. Any phone company that needs lithium-ion batteries is ultimately sourcing much of its cobalt from the DRC.
Other companies such as Samsung, BMW and VW are also racing to secure supplies, according to the report.
An Apple spokesman declined to 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 has been in the talks with miners for more than a year.
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. A metric ton now costs $80,000 which is more than triple of what it used to cost 18 months ago. Cobalt is also mined in China, Russia, Canada and Australia, but we guess that would be more pricey.
Apple is among the largest consumer of cobalt. About 60 percent of the world's cobalt supply comes from the Democratic Republic of the Congo, and about 20 percent of it is mined by hand by children, Amnesty International reported in 2016.
In recent years, Apple has stepped up its engagement with cobalt suppliers after the origin of the metal in its supply chain came under scrutiny from human rights groups.