Apple Reportedly Eyes Buying Cobalt Directly From Miners To Lower iPhone Battery Costs
Cobalt is a metal that is used in the making of batteries for all types of devices. Apple is one of the largest end users of cobalt in the world with the metal being a key ingredient in the batteries used in most of Apple devices. 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.
A new report suggests that to prevent any shortage from hurting the bottom line, Apple is currently in talks to buy cobalt directly from miners. Reports indicate that currently about a quarter of all cobalt mined globally is used in smartphones and the demand for cobalt is expected to boom by 2030.
Sources claiming knowledge of the deal say that Apple wants to sign contracts that would secure several thousand metric tons of cobalt per year for five years or longer. The unnamed sources claim that Apple began talks with the miners over a year ago and that it could decide to walk away without a deal in place.
Apple normally allows the companies that make the batteries it uses to get the cobalt required for production. If a deal was made, it would put Apple in direct competition with its own battery suppliers and automakers. Apple isn’t alone in seeking to tie up cobalt production; reports indicate the BMW AG, Volkswagen AG, and Samsung SDI are all trying to sign multi-year deals for cobalt.
As the demand for cobalt has soared, so has its price. Cobalt is seen its value more than triple over the last 18 months and is currently trading at $80,000 per metric ton.
There is a dark side to cobalt mining, however; over 2/3 of the world supplies of the material come from the Democratic Republic of Congo where child labor is used in parts of the mining industry. In January of 2016, Apple, Samsung, and Sony were all chastised for using cobalt that was mined with child labor.