Apple Inc is talking to major cobalt producers to secure supplies of the material vital for the lithium-ion rechargeable batteries that power its mobile phones, three cobalt industry sources said.
Apple declined to comment.
Locking in cobalt supplies has become a dominant theme as it is also used in batteries to power electric vehicles, whose rapid growth is revolutionizing the motor industry, which is also looking to agree on long-term supply deals.
Photo: Reuters
Automakers, mobile device makers and manufacturers of super-alloys used to make jet engines are all getting jittery about possible scarcities of responsibly sourced cobalt, the sources said.
“We’re not sure whether [Apple] wants 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. “They’ve been asking producers to make offers. We’re not sure of the volumes, but if they are looking for anything more than a couple of years, they might be disappointed.”
A Bloomberg report, citing an anonymous source, said the iPhone maker was seeking contracts to buy several thousand tonnes of cobalt for five years or longer.
Industry sources said Apple had spoken to miners such as Glencore PLC, a top producer, which said late last year it would produce about 39,000 tonnes of cobalt this year.
Asked on a results call with reporters on Wednesday about the company’s relationship with Apple, Glencore chief executive Ivan Glasenberg said: “We have not signed any deals,” adding that Glencore would not sign any long-term deals because the company did not want to lock in cobalt prices.
Cobalt prices on the London Metal Exchange, at about US$80,000 a tonne, have climbed from near US$20,000 in January 2016.
Global demand this year is estimated at more than 110,000 tonnes, of which more than 65 percent is expected to come from the Democratic Republic of the Congo (DR Congo), where it is a by-product of copper production.
Rights group Amnesty International last year said that about one-fifth of the DR Congo’s cobalt production is mined by hand by informal miners including children, often in dangerous conditions.
“Responsible sourcing has become the be-all and end-all, especially in the DR Congo and especially after the Amnesty report,” a cobalt trading source said.
DR Congo is the richest source of cobalt, but smaller deposits have also been found in nations ranging from Finland to Canada.
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