Cobalt: Rare and Everywhere : The Indicator from Planet Money Cobalt used to be a sideshow on the periodic table. Now it's the main event.
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Cobalt: Rare and Everywhere

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Cobalt: Rare and Everywhere

Cobalt: Rare and Everywhere

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  • <iframe src="" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
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VANEK SMITH: It has arrived. Here it is. Would you like to do the honors?

GARCIA: You know I would.

VANEK SMITH: (Laughter). Inside of this envelope is an element from the periodic table that I special ordered from Amazon (laughter).

GARCIA: Oh, it fell out.

VANEK SMITH: Oh, there it is.

GARCIA: There it is.

VANEK SMITH: There it is. There it is. OK. Here it is. This is the first time...

GARCIA: It's in a little plastic baggie.

VANEK SMITH: ...We have seen cobalt.

GARCIA: Yes. It's safe, right? (Laughter) You don't actually know.

VANEK SMITH: I Googled it and it's not toxic, apparently, unless you eat it. I can't 100 percent say if it's safe.

GARCIA: All right, we should describe what it looks like.

VANEK SMITH: Yeah. Yeah. Yeah. Go.

GARCIA: It's, like, silver. It's shiny, silvery. It's about the length of a cufflink is what it looks like, right?

VANEK SMITH: (Laughter) Yes. Yes. It is the length of a cufflink or a Mike and Ike if we're going to go down-market a little bit.

GARCIA: (Laughter) Yes.

VANEK SMITH: The reason that I wanted to order this is because it is a rare earth metal. It is only found in a few places in the world. But in spite of that, we pretty much all have cobalt on us at any given moment. That is because cobalt is one of the main components in our cellphones - in our cellphone batteries. And in a lot of ways, cobalt made our cellphones possible.

GARCIA: Your phone has about 8 grams of cobalt in it - 8 grams. And when you put it together, it's about the size of a Mike and Ike.

VANEK SMITH: Like our little piece of cobalt here. It's like it's this - this is about as much cobalt as is in our phones.

GARCIA: And that is our indicator for today - 8 grams, the amount of cobalt in your cellphone.

VANEK SMITH: Cobalt was at the center of the cellphone revolution, and now it seems to be at the center of another major technological revolution. And so everyone from Apple to Tesla to BMW is racing to lock down their cobalt supply.


VANEK SMITH: In the late '80s, the pager was king. They were really cool, and they were this cutting-edge technology. All of the best engineers who were graduating were working on pagers, making them smaller or sleeker or giving them more capabilities. But when Micheal Austin graduated from college, he had a different idea. He went to work for Motorola. But instead of joining the big teams working on pagers, he joined an obscure group of people in this new part of the company.

MICHEAL AUSTIN: Kind of a rogue team branched out of paging. We had a battery division down in Plantation, Fla., just for cellphones.

GARCIA: Cellphones - a phone you could take wherever you went, wasn't plugged into an underground cable or to a telephone wire at all. This was a revolution - easy to forget now.

VANEK SMITH: When Micheal joined the team, Motorola had just developed one of the very first portable phones. The phone was black and boxy, about the size and shape of a gold bar, weighed about 2 pounds.

AUSTIN: The battery was in a bag.

VANEK SMITH: Like a little duffle bag?

AUSTIN: It was actually larger than the phone. Yeah, like a separate bag. They called it a bag - they called it a bag phone.

GARCIA: A bag phone.

VANEK SMITH: (Laughter).

GARCIA: It actually it came in a soft-sided attache case...

VANEK SMITH: With room for a Day Runner, I should add. Like, with room for one of those huge Day Runners that everybody used to have.

GARCIA: There was a transmitter with an antenna, a separate battery and, of course, the phone itself. The whole thing weighed nearly 10 pounds.

VANEK SMITH: After that, Micheal's team decided to try fusing everything together into one unit. This was the next step in the cellphone. Just one device. You did not need a bag for it. And the brick phone was born. They were blocky. They were beige. They had this big, fat, black antenna coming up out of them.

AUSTIN: It was amazing. But it was a 2 1/2 pound phone...

VANEK SMITH: (Laughter).

AUSTIN: ...That you could buy for 3,000 - $3,500. And, you know - and you had this big, old, fat battery that slides on the back.

VANEK SMITH: This phone got a huge boost from the movie "Wall Street." You remember this movie, Cardiff?

GARCIA: Oh, yes, indeed. Greed is good.

VANEK SMITH: Everyone who works anywhere near economics remembers. In the movie, Michael Douglas' sort of corrupt and super slick character - this stock trader, I think - right? Gordon Gekko in one of the scenes calls up this guy that's working for him. And he calls him from the beach.


UNIDENTIFIED ACTOR: (As character) Yeah.

MICHAEL DOUGLAS: (As Gordon Gekko) Money never sleeps, pal. Just made 800,000 in Hong Kong gold. It's been wired to you.

VANEK SMITH: So he's, like, walking down the beach and talking on the phone at the same time like a boss.


VANEK SMITH: I know. I mean, this was, like, mind-blowing at the time. He's watching the sunrise and he's walking down the beach.


DOUGLAS: (As Gordon Gekko) I've never seen a painting that captures the beauty of the ocean in a moment like this. I'm going to make you rich, Bud Fox.

GARCIA: Yeah. In that scene, Michael Douglas looks, well, frankly, ridiculous in hindsight. But at the time, he looked like a badass. Of course, immediately after this conversation Michael Douglas would have had to run back to his villa to charge his phone.

AUSTIN: It lasted for 20 minutes of talk time. So, you know, that was gripping. Twenty minutes - well, I was the mechanical engineer that had to figure out how to stick six cells into that fat pack.

VANEK SMITH: That's, like, 20 minutes' worth of talk time, those cells.


GARCIA: The hard part in creating phone batteries, Micheal says, is that Motorola wanted something rechargeable, not like alkaline batteries that you use and then throw away. Phone makers wanted a battery that you could charge up again and again for the entirety of the life of the phone. And the technology was really, really new. The batteries were big and heavy, and the charge didn't hold for very long. But then...

AUSTIN: There was a dramatic breakthrough with the invention of lithium-cobalt-oxide chemistries that came out.

VANEK SMITH: Lithium-cobalt-oxide batteries - they were six times more powerful than the old batteries. Suddenly, phones could be small, and light and cheap, and the battery could last for hours. Micheal's phone technology took a quantum leap beyond anything he could've imagined. And just a few years later, Motorola was making a phone that you could fit in your pocket. And this was the vision Micheal's team had always had. They just thought it would be, you know, 50 years down the road.

AUSTIN: You know, when we were saying that, everyone was saying, this is in the far, distant future we're going to see these types of communicators. Well, holy crap, you know? It was only five years, six years after the bag phone - that was huge - or the brick phones.

VANEK SMITH: And at the center of this quantum leap was cobalt - scruffy little cobalt used in tires, and magnets and basically just the afterthought of the periodic table.

GARCIA: Micheal says lithium brought all the juice to the battery. It was powerful, and it packed a ton of energy into this tiny little battery. Cobalt, though, was the stabilizer. It could calm down the lithium, and - this is equally important - it allowed the phone battery to hold the charge again and again.

VANEK SMITH: At the time, cobalt was usually only mined when it was found along with copper in copper mines. Suddenly, though, cobalt itself was in great demand.

AUSTIN: It wasn't even considered an important metal. I think they kind of had to come up with uses for this.

VANEK SMITH: Oh, because they just didn't want to throw it away.

AUSTIN: Yeah, because they don't want to throw it away. So, you know, wherever they are mining copper, where - if they found this metal, they were like, well, who could - can we figure out some uses for this, this kind of gray, shiny stuff?

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

AUSTIN: It's the main event, baby.

GARCIA: Cobalt is in most of the cellphones, laptops, tablets and electric cars on the planet.

VANEK SMITH: Cobalt was no longer the wallflower. It was the leading lady. But this caused some problems because there is just not a lot of cobalt in the world. It is a rare-earth metal. And it was also a metal that nobody had really cared about. So no one had really aggressively looked for cobalt before. Most of the world's known supply is in the Democratic Republic of the Congo, and that is another problem. Congo is a very unstable country in Central Africa, notoriously corrupt. And many of the mines there are controlled by warlords. And the cobalt itself, in many cases, is being mined by children as young as 7 working in just horrific conditions.

GARCIA: And now demand was high, and the price, of course, went way up. Price of cobalt has tripled in the last two years. It now costs about $36 a pound. So if you're Apple, you now have two problems. First, most of your company's profits come from selling phones, and all of those phones need cobalt. And second, your cobalt need is about to explode for another reason.

VANEK SMITH: Yes. Apple has big plans to jump into the electric car business. Electric cars, of course, run on rechargeable batteries that are a lot like the batteries in cellphones. But these car batteries use way more cobalt - like, a thousand times more than a phone.

GARCIA: So it's rare. The price is erratic. The people who control the supply are shady. And in some cases, they're committing terrible crimes to get the cobalt out of the ground. And it's central to your company. So what do you do?

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 trying to contract a mine in the Congo. It would essentially be Apple's mine - not owned by Apple, per se, but dedicated to Apple. And she says one reason for this is that Apple could possibly control the conditions of the mine. For instance, they could make sure that the workers in the mine were adults, that the workers got breaks for meals, that they were paid properly, that they weren't under duress.

GARCIA: Yeah, and also, Apple could lock in a price, and a reliable and consistent supply of cobalt. Shira says this is kind of strange, but locking supplies down like this has been a key to Apple's success in the past.

OVIDE: It is definitely part of Apple's DNA that it makes these long-term contracts with the parts manufacturers.

GARCIA: And Shira says there's a famous story about Apple locking down a supply chain for the iPod.

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 guarantee this expensive and highly fluctuating-in-price component. So Apple was able to make a deal that made sure they had access to that component that maybe its competitors did not and that Apple could also ensure the price. And, you know, all of that is kind of done by Tim Cook, who used to be Apple's chief supply chain nerd and is now the company's chief executive.

GARCIA: BMW, Tesla, Volkswagen - they're also looking to lock down supplies in the Congo, trying to ensure reliable access to their supply of the rare earth. But this planning could backfire. Other battery technologies are being developed that don't rely on cobalt.

VANEK SMITH: Yes. Micheal Austin, the engineer who helped develop the cellphone - he now works for a company called BYD. It's a Chinese company that makes a lot of electric vehicles. And he says all kinds of different technologies are being developed. They use a lot of iron-phosphate batteries, which are slightly bigger and less powerful than lithium-ion, but they don't need any cobalt. And the technology is still evolving, which means, soon, demand for cobalt could go way back down, and the price could tank. And Apple, BMW and Tesla could be stuck with contracts for cobalt going out years, all in service of a technology that is as outdated as Michael Douglas on the beach with a brick phone.


DOUGLAS: (As Gordon Gekko) This is your wake-up call, pal. Go to work.


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