According to a new report from Bloomberg, Samsung has joined Apple in taking an unprecedented step to secure cobalt supplies for its next-generation smartphones. Samsung C&T, one of the many arms of the Samsung conglomerate, is reportedly negotiating directly with a mine in the Democratic Republic of Congo to secure cobalt.
The element is an important component in the rechargeable batteries used in smartphones, but increasing competition — particularly from electric car manufacturers — has made an already-scarce element even more valuable.
The report on Samsung’s activities follows news last month that Apple was also in negotiations with a miner to secure cobalt supplies. Samsung’s case makes a little more sense — the firm manufactures some batteries in-house, whereas Apple contracts out all battery manufacturing — but it’s still an unusual move for Samsung to go directly to the miners.
Although the electric car market is still relatively small right now, auto manufacturers are preparing for a steep increase in demand for electric vehicles in the next few years. That will stress the world’s supply of cobalt, and that reality is reflected in the current price. 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.
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. Two-thirds of the world’s cobalt production comes from the Democratic Republic of Congo, a region not exactly known for its stability.