Key facts
- Rare earths startup ReElement Technologies has ceased its pursuit of an $80 million Pentagon loan.
- The decision stems from the company's inability to meet federal due diligence requirements.
- ReElement is exploring alternative federal financing options.
- The loan was part of a larger $700 million critical minerals financing package announced by the U.S. Department of Defense.
- Vulcan Elements, a magnet maker that plans to use ReElement's processed rare earths, still has its Pentagon loan on track.
- Democratic lawmakers have raised concerns about potential influence due to Donald Trump Jr.'s investment in Vulcan Elements.
Rare earths startup ReElement Technologies has withdrawn its application for an $80 million loan from the Pentagon, according to administration officials. The loan was part of a broader initiative by the Trump administration to bolster domestic production of critical minerals and reduce reliance on China.
Sources indicated that ReElement failed to meet the federal government's due diligence requirements for the conditional loan offer. The company is reportedly exploring alternative forms of federal assistance and has previously stated a preference for private equity investment over debt financing to avoid associated costs and compete more effectively with China.
The $80 million loan was a component of a larger $700 million financing package announced in November by the Department of Defense's Office of Strategic Capital. This package also included a $620 million loan for Vulcan Elements, a magnet manufacturer that intends to use rare earths processed by ReElement. Vulcan's loan remains on track.
White House senior adviser Peter Navarro had previously championed the financing for ReElement and Vulcan as crucial for supply chain resilience and national security. However, the financing package has faced scrutiny from Democratic lawmakers concerned about potential influence due to Donald Trump Jr.'s investment in Vulcan Elements.
ReElement CEO Mark Jensen had previously expressed that the company did not require the government loan and would pursue private investment, citing a desire to avoid debt. He later indicated that discussions with the government were ongoing regarding a changed structure.