Apple looking to buy cobalt direct from miners


Cutting out the middleman, Apple reportedly wants to buy cobalt directly from miners, according to a report from Bloomberg on February 21.

And, according to the sources, that's exactly it. Cobalt is key in the production of the lithium-ion batteries found in phones, laptops and tablets. In the past, the company is reported to have unwittingly bought batteries containing cobalt mined using child labor.

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. Chances are Apple will secure a contract much more easily than a battery supplier.

Other companies have made similar moves. The tech giant currently leaves cobalt buying to battery manufacturers, but now the company wants to ensure it can lock down enough of the metal to maintain a sufficient supply. "We're not sure of the volumes, but if they are looking for anything more than a couple of years, they might be disappointed".

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Negotiations are said to be in a preliminary stage, which means Apple may end up deciding not to go ahead with a deal, the article says. 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.

Apple declined to comment on the report.

Cobalt CBD0 prices on the London Metal Exchange, at around $80,000 a tonne, have climbed from near $20,000 in January 2016. Though, with interest in cobalt surging to great numbers, the money suppliers are asking for cobalt has dramatically risen too.

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. Two-thirds of the world's cobalt production comes from the Democratic Republic of Congo, a region not exactly known for its stability.

"In 2017, average annual cobalt prices more than doubled, owing to strong demand from consumers, limited availability of cobalt on the spot market and an increase in metal purchases by investors", the U.S. Geological Survey said in its annual report.