Apple is looking for long-term cobalt suppliers before electric cars take off

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

By securing their cobalt supply, Apple is doing what big manufacturers have done for years. 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. The human rights group alleged that Apple and Samsung were using cobalt from mines in China and the Congo that rely on child labor. Its first discussions for deals took place a year ago, but another source told Bloomberg that Apple might not even go ahead with the plans. Bloomberg reports that smartphone batteries use around eight grams of refined cobalt, but a battery for an electric vehicle needs more than a thousand times that amount. Companies from BMW AG and Volkswagen AG to Samsung SDI Co. are racing to sign multiyear cobalt contracts to ensure they have sufficient supplies of the metal to meet ambitious targets for electric-vehicle production.

Apple didn't immediately respond to a request for comment. The metal is a key ingredient in Apple's lithium-ion batteries for iPhones and iPads. South Korea's top oil refiner, SK Innovation Co., agreed to a deal this week of $3.9 billion with Australian Mines Ltd. BMW is also close to securing a 10-year supply deal.

Mining giant Glencore has named Apple as one of several companies it is talking to about future supplies.

The price of cobalt has more than tripled in the past 18 months to trade at more than US$80,000 a metric tonne. Two-thirds of supplies come from the Democratic Republic of Congo, where there has never been a peaceful transition of power and child labor is still used in parts of the mining industry. Apple already has the purchasing clout to ensure prioritized supplies of components, as has been seen with Sony camera sensors, but the company is not immune to shortages. Worldwide 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.

Apple has increased its engagement with cobalt miners in recent years due to scrutiny from global human rights organizations.

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