Apple is reportedly holding conversations with the cobalt miners for securing long-term supplies, according to Bloomberg. Electric vehicle production may push towards a shortage in material due to the sheer increase in required volume.
Apple and other major cobalt consumers are scurrying to access cobalt resources that are now limited-not because of the amount of ore available, but because mining companies can't get it out of the ground fast enough to keep up with everyday demand of rechargeable batteries. While smartphones use around eight grammes of refined cobalt, the battery for an electric auto requires more than 1,000 times more. Apple has around 1.3 billion existing devices, while Apple Chief Executive Officer Tim Cook has been bullish about the prospects for electric vehicles.
The sources in the report claim that Apple is looking to sign contracts to secure several thousand metric tons of cobalt a year, for up to five years, or maybe even longer.
If Apple does end up buying cobalt directly, it will be in competition with auto manufacturers and battery makers in locking up supplies of the raw material.
BMW is also close to securing a 10-year supply deal, the carmaker's head of procurement told German daily FAZ in early February.
Apple may end up deciding not to go ahead with a deal, the report said, citing another source.
On it's part, Apple declined to comment on the issue.
Ivan Glasenberg, the chief executive at mining firm Glencore, said late previous year that Apple was among several companies that the Anglo-Swiss enterprise was talking to about cobalt, without giving further details.
Cobalt prices on the London Metal Exchange, at around $80,000 a tonne, have climbed from near $20,000 in January 2016.
China, where most of Apple's devices are manufactured, is not only the world's biggest market for smartphones and electric cars, but also the largest consumer of cobalt around the globe.
Apple has increased its engagement with cobalt miners in recent years due to scrutiny from worldwide human rights organizations.
"The problem has nothing to do with the amount of cobalt in the ground but rather the number of mines now producing cobalt", said Trent Mell, CEO of First Cobalt Corp, the world biggest cobalt exploration company.