Tech Giants Scramble To Secure Cobalt Supply

Image via Wikipedia Alchemist-hp

Image via Wikipedia Alchemist-hp

Apple is rumoured to be buying long-term supplies of cobalt directly from miners for the first time, according to Bloomberg, in a bid to secure long-term supplies - possibly for an electric auto project. The metal is a key ingredient in Apple's lithium-ion batteries for iPhones and iPads.

And, according to the sources, that's exactly it.

"As a result, the global proven reserves of cobalt are dependent on the economic viability of the relevant copper and nickel mines", cautioned analysts at Natixis.

Until now, Apple left the business of buying cobalt to the companies that make its batteries.

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

A source has told Bloomberg Apple is seeking contracts to buy several thousand metric tons of cobalt over a five-year period.

This functionality will also apparently be folded into Apple's MacOS 10.14 update, codenamed "Liberty", and will see some of Apple's own iPhone apps, including Home, coming to the firm's desktop operating system.

Apple reportedly looking to buy cobalt directly from miners
Apple in talks to buy key mineral used in batteries as China secures bulk of global supply

Electronics and vehicle makers are racing to lock in supply agreements for cobalt amid fears of shortage. Companies such as BMW, Volkswagen and Samsung are also looking to lock up multi-year contracts for supplies of the metal to produce electric vehicles.

Cobalt prices have skyrocketed of late due to an expected growth in demand for electric vehicles powered by lithium-ion batteries. The price of cobalt has tripled in the last 18 months to $80,000 per metric ton.

"Responsible sourcing has become the be all and end all, especially in the DRC and especially after the Amnesty report", a cobalt trading source said.

"The problem has nothing to do with the amount of cobalt in the ground but rather the number of mines now producing cobalt", said Trent Mell, CEO of First Cobalt Corp, the world biggest cobalt exploration company.

Apple has since stopped getting cobalt from these suppliers and published a supplier responsibility guide outlining best practices.

End-users normally leave the supply of such components to their battery suppliers, but Apple is clearly concerned about a possible future shortage of cobalt. Apple cornered the market so fully that it actually caused several flash drive shortages.

Talking to reporters in London last December, Glasenberg said the company had held talks with Apple, Tesla (TSLA.O) and Volkswagen (VOWG_p.DE) as part of ongoing discussions with industrial clients.

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