Apple in talks to buy its cobalt directly from the mining companies

Apple may be looking to ensure it has adequate supplies of an essential ingredient of its iPhone batteries.                  James Martin  CNET

Apple may be looking to ensure it has adequate supplies of an essential ingredient of its iPhone batteries. James Martin CNET

Apple is in talks to buy cobalt directly from miners to help shield it from any shortages sparked by the boom in electric cars, according to a report from Bloomberg. The report is given weight by the CEO of one mining company confirming Apple has held discussions about cobalt, which is used in the lithium-ion batteries which power Apple devices ...

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

Cobalt is an essential ingredient in lithium-ion batteries for smartphones.

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.

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

Apple is said to be securing contracts for the supply of several thousand metric tons of cobalt each year for five years or more.

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.

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Some materials companies are working on ways to recover and recycle cobalt from old and faulty batteries as alternatives to mining new supplies.

Other companies have made similar moves. But as battery science continues to improve and battery quality control becomes ever more important, it's easy to believe Apple could want to exert more and more control over the manufacturing process - and locking down the necessary resources to do so would be a good first step. The talks began over a year ago but it's not certain that Apple will take a deal in the end.

An Apple spokesman declined to comment.

The price of cobalt has more than tripled in the past 18 months to trade at more than US$80,000 a metric tonne.

"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.

Industry sources said Apple had spoken to miners such as Glencore (GLEN.L), a top producer, which said late last year it would produce around 39,000 tonnes of cobalt this year.

According to report by Amnesty International in 2016, close 60 percent of the world's cobalt supply comes from the Democratic Republic of the Congo mined by approximately 20 percent under-aged children with hand.

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