(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.

The company, which must first commercialize so-far unproven direct lithium extraction technology (DLE) to produce the electric vehicle battery metal for Stellantis ( STLA ) and General Motors ( GM ), is deciding between Intercontinental Exchange's ( ICE ) NYSE or Nasdaq for the listing, said CEO Rod Colwell.

US GOVERNMENT TARGETS PUBLICLY TRADED MINERALS PROJECTS

The IPO plans come amidst Washington's growing wave of investments into publicly traded minerals projects, including rare earths producer MP Materials ( MP ) and Lithium Americas ( LAC ), part of President Donald Trump's goal off lessening the country's reliance on market leader China.

"Would the federal government do what they've done with MP Materials ( MP ) 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.