July 13 (Reuters) - The U.S. Department of Defense said on Monday it would invest $25 million in rare earths startup ReElement Technologies, part of a broader push by the Trump administration to boost domestic supplies of critical minerals and challenge China's dominance of the sector.
ReElement aims to use a novel processing technology to refine rare earths and other critical minerals at its planned commercial facility in Marion, Indiana.
The rare earths are expected to be used in magnets found in a range
of military equipment, including fighter jets, missiles and submarines.
It was not immediately clear if the $25 million investment is in the form of a grant, loan or another funding mechanism.
Representatives for the Pentagon and ReElement were not immediately available to comment.
China dominates global rare earths processing and magnet production, a strategic supply chain the United States and its allies have been seeking to diversify.
The Pentagon said the funds will be used to purchase and install equipment at the Marion site, which is expected to recycle magnets and produce rare earths as well as germanium and gallium, critical minerals used in semiconductors and defense applications.
Reuters reported last week that ReElement had stopped seeking an $80 million Pentagon loan, first announced last November, after the company struggled to satisfy the federal government's due diligence requirements.
(Reporting by Ernest Scheyder; Editing by Sanjeev Miglani)
