"Apple is seeking contracts to secure several thousand metric tons of cobalt a year for five years or longer, according to one of the people, declining to be named as the discussions are confidential", Bloomberg reported.
Amnesty International published a report in January 2016 about cobalt mines, saying that tech companies and auto manufacturers aren't doing enough to prevent child labor in the Democratic Republic of the Congo - the country is responsible for 50 percent of global cobalt production.
Electric cars in particular are expected to see global demand for cobalt more than double by 2025, and more than quadruple by 2030. Both companies have since dropped a number of small-scale mines in the Congo to prevent backlash and have turned to other suppliers. Although Bloomberg has cited an anonymous source, the news of Apple looking to buy cobalt for their batteries makes a lot of logical sense.
Compounding the predicted supply bottleneck is the fact that a considerable proportion of the global cobalt supply comes from "artisanal" miners that employ young children, operate outside of authorized mining areas, and work without basic safety equipment, according to a report a year ago from the human rights organization Amnesty International. "We are in a supply-demand imbalance and it will take miners a few years to catch up". Apple is one of the largest end users of cobalt in the world with the metal being a key ingredient in the batteries used in most of Apple devices.
Negotiations are said to be in a preliminary stage, which means Apple may end up deciding not to go ahead with a deal, the article says. 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.
Industry sources said Apple had spoken to miners such as Glencore (GLEN.L), a top producer, which said late last year it would produce around 39,000 tonnes of cobalt this year.
That's caused the companies that rely on cobalt the most to go directly to the miners and sign contracts to ensure future supplies, while also locking in a price to hedge against future price increases. Bloomberg notes that Cobalt prices have soared from a little over $20,000 per metric ton back in September 2016 to $80,000 per metric ton right now.