Vulcan Elements, a rare-earths startup with about 30 employees, secured a $620 million loan from the Pentagon, part of a larger $1.4 billion deal to boost magnet supply alongside partner ReElement Technologies. This significant funding occurred three months after Donald Trump Jr.'s venture capital firm, 1789 Capital, invested in Vulcan. The deal also includes over $550 million in private financing and other federal incentives, with the Commerce Department receiving a $50 million equity stake in Vulcan and the Pentagon receiving warrants in both Vulcan Elements and ReElement Technologies.
The loan, which is the largest made by the Pentagon’s Office of Strategic Capital, has raised questions about potential conflicts of interest given Donald Trump Jr.'s involvement with 1789 Capital. ProPublica reported that the request for the loan was initiated by Peter Navarro, a White House adviser to President Donald Trump and a friend of Trump Jr., and that Pentagon staff were urged to expedite the deal. While Vulcan's CEO, John Maslin, and spokespersons for Trump Jr. and the Pentagon deny any political influence, critics like Kedric Payne of the Campaign Legal Center highlight the "cloud of conflicts of interest" seen during the Trump administration.
Donald Trump Jr. joined 1789 Capital as a partner in 2024. The firm, founded by pro-Trump donors in 2023, has assets under management exceeding $1 billion and has invested in 22 companies since Trump Jr. joined. Analysis by the Financial Times indicates that at least four of 1789 Capital's portfolio companies have secured over $735 million in contracts from the Trump administration this year, with others receiving regulatory relief. The Office of Strategic Capital aims to reduce U.S. dependence on China for critical minerals, and the Vulcan deal, which dramatically increased the company's estimated valuation from around $200 million to $2 billion, is seen as a major step in bolstering the domestic magnet supply chain for military applications.
