Apple turns directly to mines to secure Cobalt required for batteries

Dora Pope
February 22, 2018

In the past, the company is reported to have unwittingly bought batteries containing cobalt mined using child labor. About a quarter of total cobalt production is used by the smartphone companies to manufacture the batteries, according to Bloomberg.

Apple has reportedly been in discussions to secure contracts for "several thousand metric tons" of cobalt each year for at least five years. According to Bloomberg, talks began a year ago and Apple still may not proceed with the deal.

After previously obtaining cobalt through intermediaries, Apple for the first time is in communications with cobalt miners to build long-term partnerships, Bloomberg reported Wednesday.

But due to the exponentially growing demand for the metal, prices per metric ton of cobalt have more than increased threefold from between September 2016 and January 2018 to more than $70,000.

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.

While an Apple Watch battery is an order of magnitude smaller than a vehicle battery, Apple sells hundreds of millions of devices every year.

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Apple didn't immediately respond to a request for comment. 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.

"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.

About 62 per cent of the world's cobalt supply is now controlled by China, and more than 90 per cent of that comes from Congo, according to metals consultancy CRU.

But the issue is that auto manufacturers are putting a ton of pressure on cobalt suppliers.

Over the years, the Cupertino, California-based company has faced the heat of human rights groups, which allege that Apple has kept its ethics at stake by sourcing supply from the mines involved in child labor.

Other reports by My Hot News

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