Apple Reportedly In Talks To Buy Cobalt Directly From Miners

Apple Reportedly In Talks To Buy Cobalt Directly From Miners

Apple Reportedly In Talks To Buy Cobalt Directly From Miners

Previously, the company relied on its battery suppliers to buy cobalt, the report said.

Apple may be looking to ensure it has adequate supplies of an essential ingredient of its iPhone batteries. Lots of industries require Cobalt, which is used in making Lithium Ion batteries and its shortage could mean that the competition would have to pay more to get this crucial element.

Cobalt prices have skyrocketed of late due to an expected growth in demand for electric vehicles powered by lithium-ion batteries.

Companies from BMW and Volkswagen to battery producer Samsung SDI are racing to sign multiyear cobalt contracts deals to ensure they have sufficient supplies of the metal to meet ambitious targets for electric vehicle production.

A new report from Bloomberg details that Apple is looking to secure a deal that is set to last for at least five years.

The price of cobalt has more than tripled in the past 18 months to trade at more than US$80,000 a metric tonne. 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.

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A second benefit of direct control over the cobalt supply-chain right from the mines onward would be that Apple could guarantee compliance with its supplier standards.

Cobalt demand from the electric vehicles industry is also forecast to grow from to 95,000 tonnes by 2026 from 12,000 tonnes past year, according to consultancy CRU.

"The problem has nothing to do with the amount of cobalt in the ground but rather the number of mines now producing cobalt", said Trent Mell, CEO of First Cobalt Corp, the world biggest cobalt exploration company.

Declining to be named as the discussions are confidential, the source said that the firm is in 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.

Apple is among the largest consumer of cobalt. Although Glencore - a name which may be familiar to you - is the biggest supplier, two-thirds of all cobalt supplies actually come from the Democratic Republic of Congo. In the past, the company is reported to have unwittingly bought batteries containing cobalt mined using child labor.

Apple has increased its engagement with cobalt miners in recent years due to scrutiny from global human rights organizations.

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