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Apple could buy cobalt from mining companies directly

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Cobalt is the new oil. Car manufacturers and battery manufacturers are rushing to get multi-year contracts with mining companies for their lithium-ion batteries. According to a Bloomberg report, Apple is also participating in this game because the company wants to secure its long-term supplies.

The company has never done this before with cobalt. Apple relies on a ton of suppliers for all components of its devices, including batteries. And yet, cobalt prices have tripled in the last 18 months. It is likely that Apple will get a contract much more easily than a battery supplier.

While an Apple Watch battery is smaller than a car battery, Apple sells hundreds of millions of devices each year. All these iPhone and Mac batteries are a little cobalt.

But the problem is that automakers are putting tremendous pressure on cobalt suppliers. BMW and Volkswagen are also considering signing multi-year contracts to secure their supply chains. And other automakers are probably also paying attention to cobalt prices.

As a side effect, buying cobalt directly into the mines facilitates control of the supply chain. It's hard to know where cobalt comes from when you buy batteries from third-party suppliers. And in this case, it can be a big problem.

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Amnesty International publishes a report in January 2016 on cobalt mining, saying technology companies and automakers are not doing enough to prevent child labor in the Democratic Republic of Congo – the country is responsible for 50% of world production of cobalt.

A few months ago, Amnesty International released an update, saying that Apple is more transparent than others. The iPhone maker is now publishing a list of its cobalt suppliers. But there is still a long way to go to ensure that mining companies respect basic human rights.

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But let's be honest. In the case of today, Apple especially wants to be able to buy enough cobalt at a fair price for its future gadgets. And the company has enough pockets to sign this kind of transactions.

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