Apple Seeks To Lock in Supplies of Cobalt, a Key Battery Component
As more and more people use portable electronics and switch to renewable energy systems and electric cars, the global demand for lithium-ion batteries is expected to rise to new heights. However, one component in particular could create a bottleneck for battery and device manufacturers: the metal cobalt.
Concerned about maintaining its supply of batteries for iPhones, iPads, and other devices, Apple is reportedly looking to lock in its long-term access to cobalt by securing the metal directly from miners. That strategy is a result of "industry fears of a shortage driven by the electric vehicle boom," according to a Bloomberg article today citing "people familiar with the matter."
Of all the materials that go into lithium-ion batteries, cobalt is the one at greatest risk of supply shortages, researchers reported last year. Cobalt mining has also been linked to child labor and other human rights abuses in places such as the Democratic Republic of Congo, which produces more than half of the world's supply of that metal.
No Comment on Confidential Talks
Apple is "one of the world's largest end users of cobalt for the batteries in its gadgets, but until now it has left the business of buying the metal to the companies that make its batteries," according to today's Bloomberg report. The company reportedly began negotiating directly with cobalt mining firms more than a year ago, the publication said, adding that an Apple spokesperson declined to comment on those talks.
In the meantime, other companies, such as BMW, Samsung, and Volkswagen, are also working to lock in supplies of cobalt for batteries.
"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. "Its first discussions on cobalt deals with miners were more than a year ago, and it may end up deciding not to go ahead with any deal, another person said."
Links to Human Rights Violations
Rechargeable lithium-ion batteries are driving most of the global demand for cobalt, according to a December report written by experts at the U.S. Geological Survey. As rising adoption of electric cars drives even greater demand for such batteries, the world's cobalt consumption is expected to increase by 68 percent through 2025, they said.
"[T]he supply of most materials contained within lithium-ion batteries will likely meet the demand for the near future," another team of U.S. researchers wrote in a study in October. "However, there are potential risks associated with the supply of cobalt. Furthermore, if there is rapid adoption of electric vehicles . . . demand could outpace supply for some battery-grade materials (even for lithium in the very near term)."
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 last year from the human rights organization Amnesty International.
The Amnesty report noted that some tech companies reliant on lithium-ion batteries, including Apple, BMW, HP, and Tesla, have taken more action than others in recent years to verify that their cobalt components come from suppliers that watch out for human rights abuses. However, only Apple and Samsung SDI, that company's battery manufacturing division, "have shown they are able to identify all cobalt smelters and refiners," according to the report.
Some materials companies are working on ways to recover and recycle cobalt from old and faulty batteries as alternatives to mining new supplies. If successful, such strategies could also help to alleviate price pressures and prevent a repeat of the 1978 "Cobalt Crisis," which saw rapid price spikes and supply shortages after an insurgency in the Democratic Republic of Congo (then called Zaire) disrupted operations in cobalt mining areas.
Image credit: iStock/Artist's concept.