Apple Seeks To Lock in Supplies of Cobalt, a Key Battery Component

Apple Seeks To Lock in Supplies of Cobalt, a Key Battery Component

Apple Seeks To Lock in Supplies of Cobalt, a Key Battery Component

Bloomberg is now reporting that Apple is in direct talks to buy long-term supplies of cobalt from miners for the first time. Cobalt is a key mineral used in lithium-ion batteries, and Bloomberg says that Apple is looking to secure contracts for several thousand metric tons of cobalt each year for five years or longer.

And, according to the sources, that's exactly it.

As more and more people use portable electronics and switch to renewable energy systems and electric cars, the global demand for lithium-ion batteries is expected to rise to new heights.

As a side effect, buying cobalt straight from the mines makes it easier to control the supply chain.

And its not like it's just a small amount of the material the iPhone flogger is looking to buy.

What's more, not only Apple is racing to secure its cobalt supplies.

Mining giant Glencore has named Apple as one of several companies it is talking to about future supplies.

If Apple does end up buying cobalt directly, it will be in competition with auto manufacturers and battery makers in locking up supplies of the raw material. But as battery science continues to improve and battery quality control becomes ever more important, it's easy to believe Apple could want to exert more and more control over the manufacturing process - and locking down the necessary resources to do so would be a good first step.

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.

So far, no major deals have been announced, although BMW's head of procurement told German daily newspaper Frankfurter Allgemeine Zeitung in early February that it was close to securing a 10-year supply deal.

On it's part, Apple declined to comment on the issue. That will stress the world's supply of cobalt, and that reality is reflected in the current price.

Cobalt is a byproduct of copper and nickel mining, used until recently to harden steel and before its ability to efficiently conduct electricity was discovered.

War-torn countries like the Democratic Republic of the Congo have vast cobalt reserves and 20 percent of cobalt from that country is mined by hand and by children in some cases, Amnesty International said.

"In 2017, average annual cobalt prices more than doubled, owing to strong demand from consumers, limited availability of cobalt on the spot market and an increase in metal purchases by investors", the U.S. Geological Survey said in its annual report.

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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