Tech Giants Scramble To Secure Cobalt Supply

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Until now, Apple left the business of buying cobalt to the companies that make its batteries.

Bloomberg reported Wednesday that Apple (NASDAQ: AAPL) is in talks to buy long-term supplies of cobalt for iPhone batteries directly from miners.

Apple aims to secure contracts for several thousand metric tons of cobalt each year for five year or more, the news agency reported.

Bloomberg reports that it could be the first time that Apple buys cobalt directly from miners. Companies from BMW to Volkswagen to Samsung. are racing to sign multi-year cobalt contracts to ensure they have sufficient supplies of the metal to meet ambitious targets for electric vehicle production.

The report does not say which miners Apple will be dealing with, and Apple refused to comment on Bloomberg's story.

While a lot of research is being done on alternatives to lithium-ion batteries for safety and environmental purposes, right now the majority of our electronic gadgets are powered using lithium-ion batteries and it is a reality that's hard to escape.

Cobalt demand from the electric vehicles industry is also forecast to grow from to 95,000 tonnes by 2026 from 12,000 tonnes past year, according to consultancy CRU.

Glencore Plc Chief Executive Officer Ivan Glasenberg late a year ago named Apple among several companies the miner was talking to about cobalt, without giving further details.

Apple has since stopped getting cobalt from these suppliers and published a supplier responsibility guide outlining best practices. 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. 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.

Cobalt prices on the London Metal Exchange, at around $80,000 a tonne, have climbed from near $20,000 in January 2016.

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

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



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