Apple is reportedly in talks about buying cobalt direct from miners in a long-term deal set to span five years or more. The report is given weight by the CEO of one mining company confirming Apple has held discussions about cobalt, which is used in the lithium-ion batteries which power Apple devices.
There would be two benefits to Apple in striking such a deal …
First, as the Bloomberg report notes, it would allow the company to secure supplies of a key component at a time when shortages are feared.
Electric cars in particular are expected to see global demand for cobalt more than double by 2025, and more than quadruple by 2030.
Dealing direct with mines would provide a guaranteed supply for Apple’s batteries. Apple already has the purchasing clout to ensure prioritized supplies of components, as has been seen with Sony camera sensors, but the company is not immune to shortages.
A second benefit of direct control over the cobalt supply-chain right from the mines onward would be that Apple could guarantee compliance with its supplier standards. In the past, the company is reported to have unwittingly bought batteries containing cobalt mined using child labor. Although Apple works hard to audit suppliers, the number of links in the chain currently make this difficult, as we’ve noted previously.
A direct deal would eliminate this risk.
Bloomberg says that talks first began more than a year ago, and Apple is seeking a long-term deal – though nothing is yet certain.
Apple is not the only company seeking long-term cobalt supply deals: BMW has been seeking its own 10-year deal for its electric car program.
Glencore Plc Chief Executive Officer Ivan Glasenberg late last year named Apple among several companies the miner was talking to about cobalt, without giving further details.
Photo: Cobalt mine in the Democratic Republic of Congo (AP/Schalk van Zuydam)
