Published: Thu, February 22, 2018
Tech | By Tabitha Holland

Apple looking to buy cobalt direct from miners

Apple looking to buy cobalt direct from miners

Cutting out the middleman, Apple reportedly wants to buy cobalt directly from miners, according to a report from Bloomberg on February 21.

Another reason for market interest is that cobalt is largely produced as a by-product of copper and nickel mines.

Talks with cobalt miners could be the outcome of concerns over the shortage of cobalt as the demand from the electric vehicles escalates. The figure is expected to skyrocket to 159,900 tonnes in 2025 and to 324,300 tonnes in 2030. While Apple may just stick with relying on its battery manufacturers and scrap the direct buying route, plenty of other companies are going straight to the source.

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. 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. According to Bloomberg, talks began a year ago and Apple still may not proceed with the deal. Companies such as BMW, Volkswagen and Samsung are also looking to lock up multi-year contracts for supplies of the metal to produce electric vehicles.

Electronics and auto makers are racing to lock in supply agreements for cobalt amid fears of shortage. The amount of cobalt in every ton of ore mined is so small that it takes a high concentration to make the activity profitable.

The price per ton of cobalt rose to $82,000 on the London Metal Exchange in mid-February, its highest level since it began tracking the commodity in 2010, and has nearly tripled in value since the beginning of 2016.

About a quarter of global cobalt is used in smartphones.

"Responsible sourcing has become the be all and end all, especially in the DRC and especially after the Amnesty report", a cobalt trading source said.

Apple has since stopped getting cobalt from these suppliers and published a supplier responsibility guide outlining best practices. In response, for the first time past year, Apple released a list of all the companies from which it secures the supply of raw material. Apple cornered the market so fully that it actually caused several flash drive shortages.

The report does not say which miners Apple will be dealing with, and Apple refused to comment on Bloomberg's story.

Like this: