The iPhone maker is reportedly keen to secure several thousand metric tons of cobalt, a key ingredient used to power smartphone batteries, for five years or longer, the anonymous sources said. Apple, one of the world’s biggest users of cobalt, is believed to have first opened talks with miners over a year ago in a bid to avoid getting caught out by potential future shortages of the raw material. Two-thirds of supplies come from the Democratic Republic of Congo.
The electric vehicle boom has seen cobalt prices more than triple over the past 18 months to trade at more than $80,000 a metric ton, according to Bloomberg. Electric cars reportedly require over 1,000 times more cobalt than smartphones, sparking speculation that an eventual widespread adoption of battery-powered autos could eventually lead to the metal becoming scarce and difficult to procure.
Against this backdrop, Apple, which currently leaves the duty of buying cobalt to the companies that make its batteries, is eager to ensure that it has sufficient supplies of the raw material to see out any potential shortfall. The company uses cobalt to power many of its gadgets, including the iPhone and iPad.
Reports that Apple is in talks with miners came several months after Ivan Glasenberg, CEO of Anglo–Swiss commodity giant Glencore PLC (GLCNF), named the iPhone maker as one of several companies it had held conversations with about cobalt. An Apple spokesperson declined to comment on Bloomberg’s report.
Apple isn’t the only company keen to strike a deal with miners. Carmakers BMW AG and Volkswagen AG (VLKAF) and Samsung SDI Co., a battery supplier to auto firms and affiliate of Samsung Electronics Co Ltd. (SSNLF), have also made similar efforts to sign multi-year cobalt contracts.
No major deals have been announced as yet, although BMW is confident that this could soon change. The German automaker’s head of procurement recently told local media that it is close to securing a 10-year supply deal, according to Bloomberg. (See also: New Battery Technology Investment Opportunities.)