Apple considering buying cobalt directly amid booming demand

Herbert Rhodes
February 22, 2018

A Bloomberg report, citing an anonymous source, said the iPhone maker was seeking contracts to buy several thousand metric tonnes of cobalt for five years or longer. One source told Bloomberg that the iPhone maker first started the discussion on the cobalt deals a year ago, but that there are chances that talks may not go anywhere right now.

"We're not sure whether (Apple) want to buy the cobalt for the battery makers that supply them or whether they are planning to stand behind the cobalt supply chain as guarantors", a cobalt industry source said.

Apple is not the only company seeking long-term cobalt supply deals: BMW has been seeking its own 10-year deal for its electric auto program. An electric vehicle battery uses one thousand times more refined cobalt than a smartphone does, therefore meaning that it's actually the automobile industry which is taking up cobalt supplies.

Apple said last March it would stop buying cobalt mined by hand in the Congo following reports of child labor and unsafe work conditions. About a quarter of global cobalt production is used in smartphones. Carmakers are also racing to lock up cobalt contracts as they prepare to make more electric vehicles. On it's part, Apple declined to comment on the issue.

DRC's near-monopoly position in cobalt mining has been fraught with ethical and economic issues, most notably child labor in the mines.

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Cobalt prices went ballistic previous year, with the metal quoted on the London Metal Exchange ending 2017 at $75,500 per tonne, a 129 percent annual surge sparked by intensifying supply fears and an expected demand spike from battery markets.

About 62 per cent of the world's cobalt supply is now controlled by China, and more than 90 per cent of that comes from Congo, according to metals consultancy CRU.

Tenke's mines contains one of the world's largest known deposits of copper and cobalt. Cobalt has been at the center of several heated debates over the years as the largest supplier of cobalt is the Republic of Congo, where even children work as miners. Currently, around 25 percent of the annual cobalt production is used in mobile devices.

In a report in early 2016, Amnesty International alleged that Apple and Samsung Electronics' Chinese suppliers were buying cobalt from mines that rely on child labour.

Other reports by TheSundaySentinel

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