Bloomberg reported Wednesday that Apple (NASDAQ: AAPL) is in talks to buy long-term supplies of cobalt for iPhone batteries directly from miners.
Cobalt prices have skyrocketed of late due to an expected growth in demand for electric vehicles powered by lithium-ion batteries.
Cobalt is an essential ingredient in lithium-ion batteries for smartphones. While those devices use about eight grams of refined cobalt, the battery for an electric car requires over 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.
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. 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
The move means Apple will find itself in competition with carmakers and battery producers to lock up cobalt supplies. Companies from BMW to Volkswagen to Samsung. are racing to sign multi-year cobalt contracts to ensure they have sufficient supplies of the metal to meet ambitious targets for electric vehicle production.
Shares in Apple vaulted $1.65, or 1%, to $173.50, as the clock approached noon Wednesday.
