14 DAY TRIAL // Apple is trying to secure a long-term deal for cobalt directly with miners, as the company is planning to prevent production issues caused by shortages or higher prices following the growing popularity of electric vehicles.
Cobalt is one of the essential metals used for the production of batteries, and Apple is afraid that given the growing demand for the automotive market, the industry could be hit by shortages in the coming years.
As a result, the company is aiming to purchase cobalt directly from miners, according to a report from Bloomberg, with early talks involved a possible deal over five years of more for “several thousand metric tons” of the metal every year.
And while an agreement hasn’t yet been reached, the cited source notes that Apple is very keen on going ahead with the partnership, especially because demand for cobalt is increasing.
Apple competing against BMW, VW, and Samsung for cobalt deal
Phones account for approximately a quarter of global cobalt production, and with electric cars selling better due to emission regulations, the battle for such supply deals is likely to become fiercer. Smartphones typically use approximately eight grams of refined cobalt for each battery, according to the same source, while a battery built for electric cars needs 1,000 times that amount.
Furthermore, cobalt prices have more than tripled in the last 18 months, and a metric ton now costs approximately $80,000.
Apple itself is very keen on expanding its device lineup with new models, and the next-generation iPhone alone will include three different versions, all of which are said to come with bigger batteries. As a result, the company is trying to make sure that shortages won’t force it to hold back production launches, while at the same time avoiding price increases that would eventually translate to bigger iPhone final costs.
Other companies, including car makers BMW and Volkswagen, as well as Samsung, the world’s number one phone manufacturer, are also said to be looking into securing long-term supply deals for cobalt.