Apple actually does this with a few different commodities. It sources Aluminium directly from mines and smelters in Australia [1], and prefers these type of deals over buying materials on dubious secondary markets like it is forced to do for Tantalum for batteries [2]. Before he became CEO, Tim Cook ran the entire supply chain for Apple and before that for HP/Compaq and he became a master of doing big deals to lock up global materials supplies to make it much harder for competitors to compete [3]. As a consequence Apple is known to have one of the most efficient large scale supply chains in tech.
You kind of expect, with their possibly the best supply chain teams and economy of scale, Apple will be getting some advantage over other players. Example they are possibly the largest NAND and DRAM purchasers, and yet it doesn't seems to be reflected in their product. I.e the NAND prices for Apple should be cheaper then say Lenovo, HP or Dell.
I have had the same theory about Apple's diseconomies of scale long before Gruber publish it [1], although we may have no way to prove it, this Cobalt story may just be another example. Apple are willing to pay a premium for it, as long as the supply is stable.
This seems less about scarcity and more about Apple protecting their brand.
> ...child labor is still used in parts of the mining industry.
> ...Apple has stepped up its engagement with cobalt suppliers after the origin of the metal in its supply chain came under scrutiny from human rights groups.
A great many of Apple's customers care a lot about this kind of thing. Also, Apple may genuinely feel like they're obligated to be a leader in this area.
I'm not saying it doesn't happen, because it probably does, but it would be a surprise to me if using child labour is really cost competitive. I'd expect a couple of small and desperate suppliers. Do you have a link handy?
Mining for bulk materials (iron ore, coal, copper, aggregates, etc) is going to be 100% mechanised at the scale that big buyers are interested in. If cobalt is still mined by the vein then maybe child laborers get used because they are smaller, but as battery production is getting serious child labour just won't work.
Take gold; you couldn't supply gold to a bullion bank with child labour because they do not produce fast enough. Big gold suppliers are happy with an orebody with grades measured in parts per million, and child cannot move a tonne of dirt as quickly, cheaply or consistently as a machine.
I think that you're neglecting legality/stability issues. Artisan mining can eke out a profit at low productivity rates if the laborers are operating in locations that are de jure protected from mining, but de facto have weak law enforcement. That's a big driver of artisan mining of gold, including that using child labor.
High-efficiency, high-capital-investment mining processes also require a certain amount of expected stability to justify the up-front costs. If big multinationals think that an armed group is likely to take their equipment at gunpoint, or destroy it, they'll stay away and never be in direct competition with the capital-poor, low-productivity small scale methods.
Mechanization makes sense in much of the world because there is a high up front cost, but the ongoing costs are dominated by energy and maintenance costs. If those costs are higher than the general labor cost then why would you mechanize?
Congo has been dominated by civil war for a long time, that generally depresses the cost of labor.
I'm a mining engineer. If a western company has a choice between using manual labour and mechanised they will choose mechanised because it is cheaper, faster and more reliable. They don't care what the law is, because human mining is barely competitive even at small scales.
Yes, it is a fact that there is child labour is used in some third world mines. I'm observing that it doesn't make sense to me that it is large-scale, because it only makes sense if the margins are huge, the volumes physically small and if there is an impoverished workforce.
If Apple is going to negotiate with someone directly, it doesn't make sense to me that that someone using child labour, because purely economically they shouldn't be cost effective. They would be a marginal, higher-cost producer. Isn't there a more cost-effective producer that Apple could negotiate with?
If there is a situation where human labour is cost effective at a scale Apple finds interesting, I am professionally curious because I didn't expect it to be possible. Hence a request for links. Even before negotiating, are their suppliers of serious quantities of cobalt that use human labour?
I'd almost be willing to argue that if an opinion appears on HN, it is likely to not be representative of the relevant population (especially for consumer goods like iPhones).
I'd reckon a vast majority of the users in the real world don't give a shit about it, people don't buy iPhone's because they care about privacy or child labor, they buy it because everyone else is buying it too.
Activist groups are making people give a shit about these issues. Maybe majority of the customers don’t care but if there are a small bunch of customers that are passionate and make a lot of noise and tweet negative stuff then it’s only natural for Apple to do something to protect its brand.
Maybe it's time to reopen the cobalt mines close by here [1].
Today it's a museum but at one point it supplied 80% of the worlds cobalt needs, mainly for colouring.
I wonder at what price level it would become profitable again. It was closed in 1898.
Long-term contracts are one of the better ways to encourage new supplies. There are a couple of new lithium mines in the US/Mexico which opened after signing contracts with Tesla.
Cobalt is a small enough % of the price of things that use LiIon batteries that it's a good candidate for paying extra to ensure a reliable, non-conflict-area source.
> thickphones with batteries that last for days are not.
Point me to a recent one with a recent build of Android that receives regular security updates from a reputable builder and I'll buy it immediately. I'd line up outside a building like it was Black Friday to buy a Galaxy 8 or Pixel 2 with an integrated 10000mAh battery.
But, alas, this magical unicorn "thickphone" doesn't exist on the market, even if some random Chinese manufacturer that will be gone tomorrow makes one with a four year old SoC and a three year old build of Android with no security updates since the phone's release two years ago...
>That's how I know that everyone complaining about thinner phones and reduced battery life is kidding themselves.
I definitely get worse battery life out of my iPhone 6s than I did with my iPhone 4 which was worse than my feature phones. My Nexus 6p is worse than any listed so far as well.
Putting 8 core processors in phones to (poorly) compensate for a pig of an operating system and app ecosystem doesn't help.
Compare a Li-Ion battery from 1992 vs now and you are easily talking 2+x recharge cycles that's huge on it's own. But, you also get lower weight, lower volume, increased power, and lower cost. You can even get a vast array of form factors not just little cylinders.
Granted, their are trade-offs and I would love to have 10x the power. Still, 2x energy by weight and 1/3 the cost
means I have no problem saying batteries have gotten dramatically better.
How about the advancement in steal or gasoline. Batteries are old tech. CPU advancement is very similar to increases in engine horsepower over the first 80 years which steadily doubled up to rockets and then almost completely stalled out.
Saying it's only they are only 10+x as good in the last 25 years overall is a silly standard. Recharge increase * weight decrease * cost decrease. Remember each of them are independently large improvements.
If you see the same increases happen again electric cars in 25 years would have 1,000+ mile range and charge in ~30 seconds.
Your missing the point (ill give you the benefit of the doubt that its in good faith) battery tech advances very slowly but most of the "ambitious" claims for electric cars seem to think that some magic discovery will result in a step change.
I am using its as analogy that anyone familiar with basic technology would understand.
Battery technology is increasing at a steady rate of 8% per year. Everytime you hear of a breakthrough it's at least 10 years away from being production ready.
Just to add 8% a year is doubling every decade. If you hear about something 2x as good that takes 10 years to become mainstream, then that's progress as normal.
This is scary and shows the growth of electric cars might not scale. The world's richest company, Apple, is buying up supplies of a dwindling resource that anything that uses a battery needs. This is the boost for others to research other car technology or a new battery that is always 10 years away for the last 20 years.
I'm not sure if supply is really the primary factor motivating Apple. Cobalt appears to be difficult to source if you care about holding suppliers to ethical standards; the Cobalt situation used to be regularly called out in Apple's Supplier Responsibility Progress Reports: https://images.apple.com/supplier-responsibility/pdf/Apple-P...
Mining guy. Don’t be scared there is plenty of cobalt. HPAL tech has come a long way and plenty of laterite Ni-Co around the place. Lots of it close to the surface too.
I’m working on with a couple of companies already reviewing old drill cores for Co.
In general, mining is very responsive to price signals. If a given commodity becomes dear, prices go up, and mining recommences. A couple of years later, all is back to equilibrium.
Our planet is fully of all elements. True, some deposits have higher grade ores, right on or underneath the surfaces, and are more accessible via transport links than others. It all comes down to price.
A similar thing is happening with helium too. The concern over the impending closure of the US National Helium Reserve prompted people to start looking, and the results are already promising:
https://www.bloomberg.com/news/articles/2017-11-07/tanzania-...
...is mostly released instead of being collected from reactions like producing LNG because it is currently so cheap, but could be captured, recycled, or 'mined' in much higher quantities/efficiencies if prices went up?
I could be wrong or facile, but it still sounds pretty similar.
Right now, many people don't bother recycling older phones and laptops because they can't get any money for them. If/when prices go high enough, we'll see recycling kick into high gear. The day you see Best Buy advertise "$10 for any phone!", you'll know we're actually seeing a sustained price rise.
Actually, it cost money in my city to throw away any electronic item. So either you pay for it to get thrown away on "Electronic Trash Day" or you hide it in the trash.
Exactly, we are seeing this with lithium too. Papers I have read show its extremely recyclable with potential high yields at scale so don't be scared... unless you're a junior lithium miner!
Hello mining guy - would you be perhaps up for a short chat? Our team is currently looking into innovation in the mining sector. My contact details are in my description.
The fear is not that we're going to run out, it's that we're getting cobalt directly from the suffering of others, so called "Conflict Minerals" - child labor, slave labor, etc. It's the same story with Toyota and Neodymium, Intel and Tantalum, and so forth.
Dodd-Frank made these companies aware of the problem within, and these companies are actively working towards removing Conflict Minerals from their supply chains, even if that means buying direct from miners as regional traders and smelters prove unreliable sources of Conflict-Free minerals. That's the whole story.
It is only scary because business TV would be impossibly boring to watch if they weren't bouncing from one imaginary crisis to another, all between actual disasters that no one saw coming.
I don't see how this helps with the child labor problem that they were criticized for by Amnesty International. How do you "buy directly from the miners" and verify that the miners are actually the miners doing the work? I mean, is Apple going to send people into the mine to buy the ore as it falls from the pick?
No, but they will have unscheduled and unannounced visits to the mines to ensure that the workers there are not children. Unless the mining company somehow has a mole working inside the company, it'll be hard to react that quickly to a surprise visit. That's what they do with their other suppliers that they have direct connections to. They're attempting the same with Foxconn and, supposedly, it's improved the conditions for those workers significantly.
As with their other suppliers, they do send announced and unannounced inspections and they do take action when the inspection reveals issues.
Apple is under a magnifying glass at every step of the supply chain even though they are the same as used by their competitors. They take this very seriously.
[1] https://www.businessinsider.com.au/how-apple-forced-microsof...
[2] http://www.newsweek.com/2015/02/13/where-apple-gets-tantalum...
[3] http://fortune.com/2009/02/19/report-apple-has-cornered-the-...