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Nov 4 (Reuters) - A California lithium company plans to launch an initial public offering next year as part of a bid to become an attractive investment target for the U.S. federal government. Controlled Thermal Resources (CTR), which has been privately held for more than a decade, aims by next July to spin off its minerals assets and part of its geothermal power generation business into a publicly traded firm to be called American Critical Resources. Sign up here. US GOVERNMENT TARGETS PUBLICLY TRADED MINERALS PROJECTS "Would the federal government do what they've done with MP Materials if it was private?" said Colwell. "There seems to be a pattern that's been formed in Washington for a desire to work with public companies versus private companies and have a path to liquidity." When asked if the IPO was aimed at trying to secure U.S. government funds, Colwell said: "Absolutely." Colwell, who will become the CEO of American Critical Resources, controls the majority of CTR's private shares along with family members. He declined to provide a valuation estimate for the new company, adding that conversations are in early stages. FIRMS STRUGGLE TO COMMERCIALIZE DIRECT LITHIUM EXTRACTION The company - like its peers - has struggled for years to commercialize direct lithium extraction technology (DLE), a process backers say is more sustainable than open-pit mines and evaporation ponds, the two most common methods to produce lithium. It missed a self-imposed deadline to supply GM by 2024. The project, based at the Salton Sea, roughly 160 miles (258 km) southeast of Los Angeles, which is slated to produce lithium starting in 2028, was added to a fast-track permitting list by the Trump administration. In addition to lithium, the new company aims by 2029 to produce zinc, manganese and potash from brine extracted from deep reservoirs, which teems with myriad critical minerals. Australian advisory firm Hall Chadwick and investment bank Cohen & Co are advising on the IPO process. The Salton Sea project faced a lawsuit from environmental group Earthworks due to concerns about water use. A state court ruled earlier this year against the environmental group, which is appealing. This latest California lithium push comes amid increasing competition to be the first in the U.S. to deploy DLE. Arkansas, for example, is vying to beat California to that mark. Reporting by Ernest Scheyder in New York; Editing by Conor Humphries Our Standards: The Thomson Reuters Trust Principles., opens new tab Ernest Scheyder is a senior correspondent covering critical minerals and the global energy transition, as well as the author of "The War Below: Lithium, Copper, and the Global Battle to Power our Lives," which was longlisted for the 2024 National Book Award and was named the American Energy Society’s Energy Book of the Year. He previously wrote about the U.S. shale revolution – drawing on a two-year stint based in oil-rich North Dakota – as well as politics and the environment. A native of Maine, Scheyder is a graduate of the University of Maine – where he was named a distinguished alumnus in 2021 – and Columbia Journalism School.
