Apple is reportedly seeking to secure its own cobalt supplies directly from miners, as it needs cobalt to make lithium-ion batteries for iPhones and iPads.
If it manages to strike a deal in this respect, Apple would be able to purchase cobalt from miners and ensure a long-term steady supply that would allow it to continue making batteries despite industry concerns of shortages.
Apple In Talks To Buy Cobalt From Miners
According to a new report from Bloomberg, Apple's partner companies in charge of manufacturing batteries for iPhones and iPads are heavily reliant on the availability of cobalt, so Apple reportedly wants to handle this matter itself.
As the electric vehicle market is rapidly expanding, there are industry concerns that cobalt could become increasingly harder to find. Smartphones that pack Li-Ion batteries account for roughly a quarter of cobalt production globally, with a smartphone using roughly eight grams of refined cobalt.
An electric vehicle battery, however, would need more than a 1,000 times that. It means that it may be tough for device makers to source enough cobalt in the future.
The vast majority of cobalt comes from the Democratic Republic of Congo, but the price has been gradually surging. In the past year and a half, cobalt has reached $80,000 per metric ton, which means that its price more than tripled.
Apple is the world's largest cobalt end user, relying on the metal ingredient to make batteries for its mobile devices, but so far it left its metal supply chain in charge of buying the material.
"Apple is seeking contracts to secure several thousand metric tons of cobalt a year for five years or longer," Bloomberg reports, citing sources familiar with the matter.
One source tells Bloomberg that Apple started having talks about potential cobalt deals more than a year ago, but the discussions may not result in an agreement.
The Race To Secure More Cobalt
Several heavyweight companies including BMW, Volkswagen, and Samsung are reportedly racing to secure long-term cobalt deals to ensure they have enough supplies. No major deals are in place yet, but BMW is reportedly close to striking a massive supply deal for a decade.
If Apple manages to reach a multi-year deal with miners to purchase cobalt, it would not only ensure that it has sufficient cobalt supply to meet its targets, but it would also be able to get a better idea of the mining process and the people involved in it. In turn, this would ease concerns regarding child labor as Apple has previously faced scrutiny from human rights organizations over this matter.