Apple Reportedly In Negotiations With Miners To Get Long Term Cobalt Contracts Directly From Mines

Apple wants to ensure that it is able to lay its hands on enough supplies of cobalt – the key ingredient for batteries and this has forced the tech company to engage in discussion for purchasing long-term supplies of cobalt. The company wants to purchase the metal directly from the mines for the first time. The industry is facing a sortie of the metal due to the boom in electric vehicles. This was reported by the media quoting sources with knowledge of the matter.

Till now, Apple does not interfere in the buying of cobalt and it is done by the companies that manufacture the batteries for its iPhones despite it being amongst the largest end users of cobalt used in the batteries that are fitted in its various gadgets. Top of Form

The growing demand for the metal due to the rise in the number of batteries being made for electric vehicles has created a shortage of the same globally, and the negotiations being done by Apple shows that the company is keen to make sure that there is enough cobalt for its own batteries for he iPhones and iPads.

If media reports are to be believed, the target of Apple is to secure supply of several thousand metric tonnes of the metal for a period of five years.

Lithium ion batteries for smartphones makes extensive use of cobalt. Only about 8 grams of refined cobalt is needed in smartphones but batteries for an electric car uses up about 1,000 times more of the metal compared to smartphones.

The attempt by Apple to secure its cobalt supplies puts it in direct competition with makers of electric cars and producers of batteries for those cars.

Multiyear contract deals for cobalt that would help ensure a steady and adequate supply of the metal so that the production targets are met, are being signed by auto makers like BMW and Volkswagen as well as battery manufacturers like Samsung SDI.

Even though BMW claimed to be close of securing such a multi-year deal according to an interview of its procurement head to a German daily newspaper Frankfurter Allgemeine Zeitung in early February, there has been no news of any major form of deal that has been announced.

Sources have also told the media that it has been about a year that talks about cobalt deal were first initiated by Apple and that the tech giant could decide on not continuing with the deal.

While no details were given, the Anglo-Swiss mining firm Glencore had said late last year that among the many companies that it was in talks with was Apple.

With a current price tag of over US$80,000 a metric tonne, there has been a three-fold increase in prices of the metal in the last 18 months.

The Democratic Republic of Congo account for over two-thirds of the global cobalt supplies. The country has been under pressure because of continuous infighting and is also accused of rampant use of child labor.

(Adapted from SCMP.com)

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