Apple may buy cobalt direct from mining companies as EV demand soars

Apple may buy cobalt direct from mining companies as EV demand soars

Lindsey Duncan
February 22, 2018

Currently, 55,400 tons of cobalt - or a quarter of global cobalt production - are used for smartphones, electric cars and other lithium-ion battery productions, according to Darton Commodities, a company that specializes in procurement, financing and distribution of cobalt.

Apple doesn't make its own batteries (yet), so buying up the raw materials is an unusual step for the company.

And its not like it's just a small amount of the material the iPhone flogger is looking to buy.

According to a new report from Bloomberg citing an anonymous source, Apple aims to secure contracts for several thousand metric tons of cobalt each year for five year or more, the news agency reported.

Locking in cobalt supplies has become a dominant theme as it is also used in batteries to power electric vehicles whose rapid growth is revolutionising the motor industry, which is also looking to agree long-term supply deals.

Dealing direct with mines would provide a guaranteed supply for Apple's batteries.

Apple's reported move is neither new or surprising says Ilja Graulich of Madini Minerals, a junior mining company based in Johannesburg with interests in the DRC.

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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.

If anything, prices for the metal are expected to rise even further this year, as the Democratic Republic of Congo, responsible for more than half the world's supply, recently hiked its taxes and royalties on the metal.

Bloomberg's source reported that Apple may not actually go ahead with a deal, as the parties involved are still only in the discussion phase.

Tenke's mines contains one of the world's largest known deposits of copper and cobalt. And yet, cobalt prices have tripled over the past 18 months.

The company reportedly began negotiating directly with cobalt mining firms more than a year ago, the publication said, adding that an Apple spokesperson declined to comment on those talks.

Such companies are also facing growing public pressure to use cobalt that has not been procured using supply chains that involve human rights violations, something Apple has received scrutiny for in the past.