Apple speaking with miners directly to buy cobalt

Apple speaking with miners directly to buy cobalt

Apple is reportedly looking to secure contracts for several thousand metric tons of cobalt per year for five years or more.

According to Bloomberg, the tech giant is in talks to buy long-term supplies of cobalt directly from miners.

Samsung, Apple's competitor, is resorting to recycling old batteries in any old mobile phones by extracting cobalt from them, according to Bloomberg earlier this month.

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Cobalt prices went ballistic past 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.

According to Darton Commodities, cobalt use in electric vehicles and other lithium-ion battery applications was at 48,900 tonnes in 2016, and raised to 55,400 tonnes in 2017.

Apple ranks among the top companies for having taken "adequate action" to make sure its cobalt supply chain is safe, according to the organization.

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Electronics and vehicle makers are racing to lock in supply agreements for cobalt amid fears of shortage. "The market is expected to remain in surplus supply until forecasts of exponential growth in electric vehicle sales materialize around 2020", said its annual report. Darton, however, feels that the share would drop because of the growth in the auto sector.

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 Congo, where it is a byproduct of copper production. However, the country has always been marred by political instability and accusations of child labor. Much of that bumper 44% dividend payout is due to the spike in cobalt, which saw a 108% increase on the average price, from $12 a pound to around $25 a pound a year ago alone.

Asked on a results call with reporters on Wednesday about the company's relationship with Apple, Glencore's 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. Apple is one of the largest consumers of the metal-used in the batteries that power its gadgets-but is looking to go directly to the source for the first time amid rising competition from the burgeoning electric vehicle industry. Additionally, it vowed not to take supplies from any company who fails to prove that "appropriate protections" are in place to safeguard against child labor, notes MacRumors.

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