Vulcan Elements, a rare earths start-up with only 30 employees, has secured a massive $620 million loan from the U.S. Department of War, just three months after 1789 Capital, the venture capital firm where Donald Trump Jr is a partner, invested in the company.
The funding forms part of a larger $1.4 billion package aimed at building up domestic production of rare earth magnets, in partnership with ReElement Technologies, according to the Financial Times.
The deal, finalized last month, is the largest financing issued so far by the Pentagon’s Office of Strategic Capital. It’s also the latest in a string of federal contracts quietly flowing toward companies backed by Don’s $1 billion-plus fund.
Vulcan will work with ReElement to produce magnets used in weapons systems, aircraft, satellites, drones, and submarines.
To round out the deal, over $550 million in private money and additional federal support were thrown in. The Commerce Department will also grab a $50 million equity stake, and the Pentagon will receive warrants in both Vulcan and ReElement.
Trump-linked venture firm keeps winning federal contracts
1789 Capital, the venture firm where Don has played a key role since 2024, invested in Vulcan’s $65 million Series A round in August.
That round was led by Altimeter Capital, and 1789 co-founder Chris Buskirk later posted on X that the firm would join the next round too. 1789 was formed in 2023 by Republican donors Omeed Malik and Rebekah Mercer and now manages over $1 billion.
Since Don joined the firm, it has invested in 22 companies, including five in 2023 and 2024 alone.
At least four of 1789’s portfolio companies have secured contracts from the Trump administration this year, totaling over $735 million. Others have benefited from relaxed federal rules. 1789 also holds stakes in Anduril and SpaceX, which continue to land government deals.
The Trump-linked firm has expanded beyond its early anti-“woke” image and now invests in firms directly affected by Trump’s second-term policies, including crypto, where the Trump family pocketed over $1 billion in payouts over the past year.
Some of 1789’s portfolio names that bagged defense deals include Cerebras Systems, which landed a $45 million agreement with the Pentagon, and PsiQuantum and Firehawk Aerospace, both of which pulled in over $10 million each from the U.S. Air Force.
In October, Unusual Machines, where Don held a multi-million-dollar stake, locked in its largest contract ever from the Pentagon. But Vulcan’s new $620 million award dwarfs them all.
Loan deal renews questions about influence and access
The Pentagon insists the Trump connection played no role in Vulcan’s loan approval. A spokesperson said Don and 1789 Capital were “not involved in any aspect” of the negotiation process. Officials from the Commerce Department and Vulcan said the same.
A spokesperson for Don also allegedly told the Financial Times he had “no involvement in negotiations” with the government for any of 1789’s portfolio companies.
But that hasn’t stopped scrutiny. Kedric Payne, general counsel at the Campaign Legal Center, said: “Presidents are expected to avoid even the appearance that they are using their office to financially benefit themselves or their family.
While we do not know for certain if, or how, the president may have influenced this loan, it falls under the cloud of conflicts of interest we have seen throughout this administration.”
The timing and scale of Vulcan’s windfall only adds fuel. Don had said in February he was “very involved in the strategic decisions regarding where to invest our resources” at 1789. And Trump’s sons have been pouring money into ventures that benefit from their father’s regulatory moves. That includes crypto firms that cashed in once Trump eased digital currency rules during his second term.
Meanwhile, the Trump Organization, now run by Don and his brother Eric Trump, keeps signing real estate deals worldwide. Just last month, one day before Saudi Crown Prince Mohammed bin Salman visited the White House, the Trump family announced a partnership with a Saudi firm to build a luxury resort in the Maldives.
Eric told the Financial Times their father “has nothing to do” with any of their business ventures.
Back at Vulcan, CEO John Maslin told the Financial Times his company would grow to 50 employees by year-end. He said the goal is to secure a reliable magnet supply chain to support the U.S. military.
“Every ship, every submarine, every tank, every missile, every aircraft, every drone, every satellite — every piece of hardware that moves uses a rare earth magnet,” John said.
John vowed that there has been “zero contact with the president’s son” adding that 1789’s stake is small, with no board or observer rights. “This was not about political favours. This was purely a merit-based process.”
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