Published: Thu, February 22, 2018
Tech | By Constance Martin

Apple reportedly buying long-term supplies of cobalt directly from miners

Apple reportedly buying long-term supplies of cobalt directly from miners

Bloomberg is now reporting that Apple is in direct talks to buy long-term supplies of cobalt from miners for the first time. Electric vehicle production may push towards a shortage in material due to the sheer increase in required volume. Seeing as this isn't a large quantity of cobalt, it's no smartphones which are depleting cobalt resources: it's electric cars.

There is a growing demand for the mineral coming from electric cars which run on lithium ion batteries, but now around 25% of cobalt production is bought by smartphone companies.

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

Electronics and auto makers are racing to lock in supply agreements for cobalt amid fears of shortage.

Shares in Apple vaulted $1.65, or 1%, to $173.50, as the clock approached noon Wednesday. In response, for the first time previous year, Apple released a list of all the companies from which it secures the supply of raw material.

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Apple is now discussing the possibility of purchasing cobalt directly from miners instead of allowing third-party manufacturers to secure the necessary element.

Cobalt prices have risen three-fold in the past 18 months to more than $80,000 per metric tonne.

BMW is also close to securing a 10-year supply deal, the carmaker's head of procurement told German daily FAZ in early February.

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. According to Amnesty International, about 20 percent of the cobalt mined in Congo is extracted by hand by informal miners including children, often in risky conditions. Volkswagen reportedly tried to lock deals with cobalt suppliers by treating them to meetings in a 30,000-seat stadium in their corporate hometown in Wolfsburg, Germany.

The cobalt Apple uses at the moment comes from Congo and it does get a lost of criticism because the labour used in such mines suffer from appalling conditions and use child labour.

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