Apple considering buying cobalt directly amid booming demand

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Apple reportedly looking to buy cobalt directly from miners

The tech titan is in negotiations to buy long-term supplies of cobalt directly from miners, Bloomberg reported Wednesday.

Apple and other major cobalt consumers are scurrying to access cobalt resources that are now limited-not because of the amount of ore available, but because mining companies can't get it out of the ground fast enough to keep up with everyday demand of rechargeable batteries. Although Bloomberg has cited an anonymous source, the news of Apple looking to buy cobalt for their batteries makes a lot of logical sense. Bloomberg reports that smartphone batteries use around eight grams of refined cobalt, but a battery for an electric vehicle needs more than a thousand times that amount.

The key element in every lithium-ion battery is in heavy demand as the electric vehicle industry will need more of it in the future.

Electric auto companies such as BMW and Volkswagen have been rushing to woo and procure long-term contracts with cobalt producers, according to Bloomberg. Volkswagen reportedly tried to lock deals with cobalt suppliers by treating them to meetings in a 30,000-seat stadium in their corporate hometown in Wolfsburg, Germany. BMW is also close to securing a 10-year supply deal with an unnamed supplier in February.

Bloomberg's source reported that Apple may not actually go ahead with a deal, as the parties involved are still only in the discussion phase. In response, for the first time a year ago, Apple released a list of all the companies from which it secures the supply of raw material. "There's absolutely no excuse for anyone under legal working age to be in our supply chain", the company said in its most recent Supplier Responsibility Progress Report.

Cobalt prices have risen three-fold in the past 18 months to more than $80,000 per metric tonne.

Tenke's mines contains one of the world's largest known deposits of copper and cobalt. Although Glencore - a name which may be familiar to you - is the biggest supplier, two-thirds of all cobalt supplies actually come from the Democratic Republic of Congo. Currently, around 25 percent of the annual cobalt production is used in mobile devices.

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