ReElement Technologies, a rare earths startup based in Noblesville, Indiana, has stopped seeking an $80 million Pentagon loan, according to administration officials. The loan was part of a broader $700 million critical minerals financing package announced last November by the U.S. Department of Defense’s Office of Strategic Capital.

Background

The company, which aims to use a novel processing technology to refine rare earths and other critical minerals, struggled to satisfy the federal government’s due diligence requirements for the conditional loan offer. ReElement is seeking other forms of federal assistance, including potentially a new government loan under different terms.

The $80 million loan was part of a broader push by the Trump administration to jump-start domestic production of critical minerals to challenge China’s dominance of the sector. The company’s decision to drop the loan bid may increase its borrowing costs, as Washington typically lends money at rates cheaper than private lenders.

Related Developments

Vulcan Elements, a startup magnet maker that counts Donald Trump Jr. as an investor, is still on track to receive a $620 million loan from the Pentagon. The two companies had planned to work together, with ReElement processing the rare earths that Vulcan requires to make magnets for the U.S. military.

White House senior adviser Peter Navarro said the administration continues to support ReElement, citing the company’s innovative technologies and potential to boost America’s national security. ReElement CEO Mark Jensen had previously stated that the company preferred to avoid taking on debt and would rely on private investment to grow.

Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.