Apple To Secure Cobalt Supplies From Miners

Apple To Secure Cobalt Supplies From Miners

The company is one of the largest users of cobalt, which is in the batteries of its devices, but until now the battery makers have bought the metal.

In order to ensure quality and long-term delivery of its products Apple, the iPhone maker, is in talks to buy long-term supplies of cobalt for iPhone batteries directly from miners, Bloomberg reported Wednesday, citing sources.

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

Apple is reportedly looking to secure contracts for several thousand metric tons of cobalt per year for five years or more. Its first discussions on cobalt deals with miners were more than a year ago, and it may end up deciding not to go ahead with any deal, another person said. Smartphones use only eight grams of cobalt, while electric vehicle batteries require over 8,000 grams. Companies from BMW to Volkswagen to Samsung. are racing to sign multi-year cobalt contracts to ensure they have sufficient supplies of the metal to meet ambitious targets for electric vehicle production.

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The automobile sector has certainly pushed up the demand for cobalt, but it has not peaked yet, according to Darton Commodities, which specializes in the sale of cobalt. 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. South Korea's top oil refiner, SK Innovation Co., agreed to a deal this week of $3.9 billion with Australian Mines Ltd. BMW is also close to securing a 10-year supply deal.

DRC's near-monopoly position in cobalt mining has been fraught with ethical and economic issues, most notably child labor in the mines. These players would not leave any stone unturned to secure the supply of cobalt in the future as well.

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.

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.

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