ReElement drops $80 million Pentagon loan over due-diligence issues

ReElement Technologies stopped seeking an $80 million Pentagon loan, putting one of Washington’s flagship rare-earths financing deals in doubt. The startup is now looking at other forms of federal support, including a government loan on different terms, as the White House speeds up domestic production of critical minerals.

On Nov. 21, 2025, the Office of Strategic Capital announced a $700 million conditional package split between a $620 million loan for Vulcan Elements and the $80 million loan for ReElement. The package was intended to expand U.S. capacity for rare-earth separation, metallization and magnet manufacturing, with the two companies expected to produce up to 10,000 metric tons of NdFeB magnet material over the next several years.

Both companies still had to satisfy financial, legal, technical and other due-diligence requirements before financial close. The package was funded under the One Big Beautiful Bill Act, which gives OSC up to $100 billion in lending authority for critical minerals and related industries.

ReElement’s financing was also tied to Vulcan’s magnet strategy. Vulcan plans to use rare earths refined by ReElement to make magnets for the U.S. military, linking the Indiana startup’s processing technology directly to defense supply chains that Washington wants less dependent on China. ReElement's method is a novel process for refining rare earths and other critical minerals used in electric vehicles, defense systems, motors and other advanced industrial products.

Vulcan counts the private equity fund 1789, where Donald Trump Jr. is a partner, among its investors. White House senior adviser Peter Navarro defended the companies, saying they sit at the center of supply-chain resilience and U.S. reindustrialization, and that the administration continues to support ReElement.

On Nov. 3, 2025, the CHIPS Program issued a preliminary non-binding letter of intent for $50 million in incentives, and Commerce would receive $50 million of equity in the company. Vulcan planned to use that money for equipment tied to rare-earth separation, metallization and magnet manufacturing.