Electric vehicle boom drives Apple to stock up on cobalt

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

In order to ensure quality and long-term delivery of its products Apple, the iPhone maker, is in talks to buy long-term supplies of cobalt for iPhone batteries directly from miners, Bloomberg reported Wednesday, citing sources.

A new report from Bloomberg details that Apple is looking to secure a deal that is set to last for at least five years. Bloomberg reports the company has been discussing the issue with miners for over a year, and the company has not yet decided whether it will proceed with a deal.

Talks with cobalt miners could be the outcome of concerns over the shortage of cobalt as the demand from the electric vehicles escalates. While smartphones use around eight grammes of refined cobalt, the battery for an electric vehicle requires more than 1,000 times more.

In 2014, Apple first started mapping the cobalt supply chain, according to a 2016 Supplier Responsibility report. BMW, Volkswagen and Samsung SDI are all pursuing their own deals to acquire cobalt.

Tenke's mines contains one of the world's largest known deposits of copper and cobalt.

According to metal distributor Darton Commodities, about 50,000 tons of cobalt was used in batteries and electric cars past year. Cobalt is key in the production of the lithium-ion batteries found in phones, laptops and tablets. Darton, however, feels that the share would drop because of the growth in the auto sector. 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. However, the country has always been marred by political instability and accusations of child labor. The price of cobalt has tripled in the last 18 months to $80,000 per metric ton.

Mining giant Glencore has named Apple as one of several companies it is talking to about future supplies. Additionally, it vowed not to take supplies from any company who fails to prove that "appropriate protections" are in place to safeguard against child labor, notes MacRumors. 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.

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