While many of Apple’s innovations these days are simply add-ons to existing product lines, the company isn’t averse to making bold (and sometimes controversial) bets on the future direction of technology. One case in point: its decision to remove the headphone jack on the iPhone 7.
Now Apple wants to take similarly bold steps in raw material sourcing. Last month, Apple announced its intention to create “a closed-loop supply chain” in which its voracious appetite for metals and minerals such as tin, aluminum and cobalt will increasingly be met from recycled or renewable sources.
Apple’s ultimate goal, according to its 2017 Environmental Responsibility Report, is to “end our reliance on mining altogether.”
A Laudable Aim
Avoiding the need to drain finite natural resources upstream and swell landfill sites with discarded devices downstream is the company’s stated rationale for its closed-loop ambitions. That is certainly a laudable aim. Apple has sold more than one billion iPhones since launch in 2007, so the amount of raw material that could be saved from the scrap heap from these products alone is massive.
Apple estimates that for every 100,000 iPhones that its Liam automated robots disassemble, it can potentially recover 1,900kg (4,188 lbs) of aluminum, 800kg (1,763 lbs) of copper, 550kg (1,212 lbs) of cobalt and 55kg (121 lbs) of tin, along with smaller quantities of gold, silver, tantalum, tungsten and other minerals.
Not having to deal with volatile commodity prices for virgin materials would be an additional benefit of shifting from a linear to a circular model, as depicted below.
SCM World research data shows that hi-tech firms are among the most enthusiastic about circular economy initiatives, especially their potential to generate financial returns. In 2016, 42% of supply chain practitioners in the sector said they expected their companies to invest in such activities not only because “it’s the right thing to do,” but also because they would pay back financially (see chart). In 2015, the equivalent figure was just 25%.
Another prize could be to remove a raft of troublesome sub-tier suppliers in Africa, Asia and South America from global networks. Like Intel, Apple has invested heavily in mapping and auditing its supply chain for conflict minerals in the Democratic Republic of the Congo (DRC), as required by US regulations.
Last year the company voluntarily extended this system to cobalt, a key ingredient in lithium-ion batteries. Almost two-thirds of worldwide cobalt supplies are mined in the DRC, and at least 5% of that supply is believed to be tainted by the use of child labor.
Avoiding the cost, complexity and negative media headlines of sourcing materials in this and other developing countries would seem attractive to Apple and other hi-tech and industrial firms.
Fellow U.S. pioneer Tesla’s solution, for example, has been to publicly commit to building a North America-only supply chain for cobalt, graphite and other materials to feed the first of its new lithium-ion battery Gigafactories. Tesla is also reported to have invested in a specialty U.S.-based recycler.
How Close is the Closed Loop?
How realistic is the closed-loop vision? “It’s an ambitious goal that will require many years of collaboration” with suppliers and other partners, according to Apple’s report.
In an interview, Lisa Jackson, its Vice President of Environment, Policy and Social Initiatives, admitted that Apple doesn’t know yet quite how it will be achieved. But she said that future needs would likely be met by a combination of recycled materials bought from suppliers and those recovered from Apple products.
This suggests that responsible sourcing efforts will be continue to be necessary, since the smelters that Apple, Intel and other hi-tech companies have targeted this work at process recycled and virgin materials together in the same facilities.
Trent Mell, President and CEO of First Cobalt Corp., which has mining interests in both Canada and the DRC, believes that a closed-loop system could work in the longer term.
However, the strong projected growth in electric vehicles over the next few years – from fewer than 600,000 units in 2015 to an estimated 20 million by 2030 – cannot be fulfilled without newly mined material from the world’s biggest producer being part of the mix, Mell argues.
As innovators and major customers, companies like Apple and Tesla are set to play a key role in accelerating the creation, adoption and extension of both circular economy and ethical sourcing practices over the next few years.
That ought to be good news for the planet, for supply chains and for consumers alike.