Apple has reportedly contacted suppliers of cobalt, a major element in lithium-ion batteries, to lock in supplies contracts.
Three sources from the mining industry have told Reuters that while they aren’t sure why the company is involving itself in the supply chain on behalf of its parts makers or for its own use, there have been quite a few offers made out to suppliers. However, the volume Apple is rumored to be aiming for suggests that this effort could be in support of its smart car project.
“We’re not sure of the volumes, but if [Apple is] looking for anything more than a couple of years [in a contract term], they might be disappointed,” a source said.
Cobalt miner Glencore had held talks with Apple, Tesla and Volkswagen recently, but its CEO said that the company would not enter into long-term agreements on pricing — the price of a metric tonne has quadrupled over the past two years to $80,000. The German automaker had been looking for a 10-year contract. Bloomberg had earlier reported that Apple was seeking a five-year contract.
More than 65 percent of the current year’s global demand for cobalt will be sourced from the Democratic Republic of Congo. In a report, Amnesty International claims about one-fifth of 2017’s output was sourced from informal labor, including children. One trading floor source is worried about any reverberations that may occur from mining companies’ policy changes.