Apple speaking with miners directly to buy cobalt

Apple is one of the world’s largest end users of cobalt for the batteries in its gadgets

If Apple does end up buying cobalt directly, it will be in competition with auto manufacturers and battery makers in locking up supplies of the raw material. The challenge is that with the growth of electric and hybrid vehicles gobbling ever larger amounts of the metal, Cupertino fears a shortage that could hurt its sales figures.

Apple Inc is in talks to buy long-term supplies of cobalt for iPhone batteries directly from miners, Bloomberg reported on Wednesday, citing sources.

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.

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. While smartphones use around eight grammes of refined cobalt, the battery for an electric vehicle requires more than 1,000 times more.

Electric vehicle companies such as BMW and Volkswagen have been rushing to woo and procure long-term contracts with cobalt producers, according to Bloomberg.

Apple was not immediately available for comment outside regular business hours. Cobalt is key in the production of the lithium-ion batteries found in phones, laptops and tablets.

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

A second benefit of direct control over the cobalt supply-chain right from the mines onward would be that Apple could guarantee compliance with its supplier standards.

Cobalt prices on the London Metal Exchange, at around $80,000 a tonne, have climbed from near $20,000 in January 2016. Though, with interest in cobalt surging to great numbers, the money suppliers are asking for cobalt has dramatically risen too.

The Democratic Republic of Congo accounts for two-thirds of all cobalt supplies. Global cobalt prices soared from $34,600 per ton in January 2017 to $81,360 this year, rising by about 135 percent, due to ongoing war in the Democratic Republic of Congo - the biggest cobalt producer globally.

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