March 21, 2018

Apple Could Source Key Battery Components Directly From Miners

22 February 2018, 12:49 | Ruben Fields

Apple reportedly looking to buy cobalt directly from miners

Apple believed to be trying to deal with cobalt miners

In order to produce the millions of batteries needed for the next generations of iPhones and iPads, Apple is looking to acquire a few thousand metric tons of cobalt annually for at least the next five years. The talks began over a year ago but it's not certain that Apple will take a deal in the end.

Apple may be looking to ensure it has adequate supplies of an essential ingredient of its iPhone batteries. Auto makers like BMW and Volkswagen are also looking to ink multi-year deals that would secure a constant flow of the rare metal.

The iPhone maker is one of the world's largest end users of cobalt for the batteries in its gadgets, but until now it has left the business of buying the metal to the companies that make its batteries. Bloomberg notes that about a quarter of global cobalt production is used in smartphones and that Apple is keen to shore up its cobalt supplies to have enough for sufficient production of iPhone and iPad batteries. BMW is also close to securing a 10-year supply deal with an unnamed supplier in February.

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

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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.

Apple and other major cobalt consumers are scurrying to access cobalt resources that are now limited-not because of the amount of ore available, but because mining companies can't get it out of the ground fast enough to keep up with everyday demand of rechargeable batteries. Last year, it confirmed that it was discussing the matter with a large cobalt miner, Glencore Plc. In the past, the company is reported to have unwittingly bought batteries containing cobalt mined using child labor.

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. According to Amnesty International, about 20 percent of the cobalt mined in Congo is extracted by hand by informal miners including children, often in unsafe conditions.

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