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How Cobalt Metal Affects Big Tech Firms Like Apple


The metal cobalt is found in only a few places in the world. It used to be considered just a byproduct of copper mining. It went into stuff like tires and magnets. These days, it's essential to making smartphones, and firms like Apple are scrambling to secure supplies. For more, we go to Stacey Vanek Smith of NPR's daily business podcast The Indicator from Planet Money.

STACEY VANEK SMITH, BYLINE: In the late-'80s, the pager was king. All of the best mechanical engineers were working on them. But when Micheal Austin graduated from college and went to work for Motorola, he did not join the pager team. Instead, he joined an obscure group trying to develop batteries for this new cutting-edge product - the cellphone. It was an early version, big and blocky and beige, known as the brick phone.

MICHEAL AUSTIN: It was amazing, but it was a 2-1/2-pound phone that you could buy for $3,500. And, you know, you'd have this big old fat battery that slides on the back.

VANEK SMITH: That big old fat battery was rechargeable, and this was a revolution. Of course it could only hold the charge for 20 minutes. The dream of a pocket-sized phone seemed decades off.

AUSTIN: Everyone was saying, this is in the far distant future we're going to see these types of communicators. Well, holy crap, it was only five years, six years after the brick phones.

VANEK SMITH: A new kind of battery was developed using cobalt. The lithium cobalt oxide battery was six times more powerful than the old batteries. The lithium brought all the juice and power, and the cobalt stabilized everything and allowed the battery to hold a charge again and again. Cobalt was the key.

It used to be a sidekick, and now it's, like, the main event.

AUSTIN: It's the main event, baby.

VANEK SMITH: But there was a problem. There's not a lot of cobalt in the world, and most of the known supply is in the Democratic Republic of the Congo. And many of the mines there are controlled by warlords, being mined, in many cases, by young children working in horrific conditions. So if you're Apple, and you need cobalt for all of your iPhone batteries and for your plans to expand into electric cars, which also run on these batteries, you need to find a way to lock down a steady and ethical supply of cobalt.

SHIRA OVIDE: Apple is sort of talking about buying supplies of cobalt directly from companies that mine it out of the ground.

VANEK SMITH: Shira Ovide is a technology columnist for Bloomberg. She says Apple is looking to contract with a mine in the Congo. It would essentially be Apple's mine - not owned by Apple per se but dedicated to Apple. Shira says locking down supplies like this has been key to Apple's success in the past.

OVIDE: Apple made a deal with Samsung, in that case, to lock in supply of those flash memory chips. And that was, you know, a huge reason that the iPod took off because Apple was able to make a deal that made sure it had access to that component that maybe its competitors did not and that Apple could also ensure the price.

VANEK SMITH: BMW, Tesla and Volkswagen are also working to lock down cobalt supplies. This planning though could backfire. Micheal Austin, the electrical engineer, now works for a company called BYD. It's a Chinese company that makes electric vehicles. A lot of its vehicles use iron phosphate batteries. They're a little less powerful than lithium-ion, but they don't need cobalt. And the technology is evolving fast. And soon the demand for cobalt could go way back down again. And Apple, Volkswagen, BMW and Tesla could be stuck with years-long contracts for cobalt all in service of a technology as outdated as the brick phone. Stacey Vanek Smith, NPR News.

SHAPIRO: Stacey Vanek Smith is co-host of NPR's daily business podcast called The Indicator From Planet Money.

(SOUNDBITE OF TIN HAT'S "NEW WEST") Transcript provided by NPR, Copyright NPR.

Stacey Vanek Smith is the co-host of NPR's The Indicator from Planet Money. She's also a correspondent for Planet Money, where she covers business and economics. In this role, Smith has followed economic stories down the muddy back roads of Oklahoma to buy 100 barrels of oil; she's traveled to Pune, India, to track down the man who pitched the country's dramatic currency devaluation to the prime minister; and she's spoken with a North Korean woman who made a small fortune smuggling artificial sweetener in from China.