Controlled Thermal Resources Stock and IPO: Investing in U.S. Lithium
Lithium prices are rising at their fastest pace in years as demand for the metal used in electric vehicle (EV) batteries surges. The IEA projects that lithium demand could grow by more than 40 times by 2040. Controlled Thermal Resources (CTR) is trying to be the U.S.-based lithium supplier of choice. Learn if there are ways for you to invest.
Matt Johnston Updated April 25th, 2022
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What is Controlled Thermal Resources (CTR)?
CTR is a lithium miner and geothermal energy producer established in 2013. It is currently developing a lithium extraction and geothermal energy facility in California. The company, founded by its CEO Rod Colwell, is headquartered in both California and Australia.
Lithium is a soft, silvery metal that is essential for lithium-ion batteries that power electric cars and energy storage. Although lithium is not scarce, most of the deposits where lithium is extracted today are located outside the U.S., for example, in Chile and Australia. Lithium is also expensive to process and refine, with most refining taking place in Asia, especially China. Geopolitical concerns are driving interest in U.S.-based lithium production.
CTR has assembled a team of industry experts in engineering, lithium extraction, environmental and social compliance, and construction. Leveraging this team’s expertise, the company hopes to extract lithium from the vast reservoirs of scalding hot brine trapped thousands of feet beneath California’s Salton Sea. At the same time, it plans to generate renewable energy from steam generated by the geothermal brine.
The hot brine that lies deep below the Salton Sea contains some of the largest lithium deposits in the world. This “Lithium Valley” area, as Colwell and others envision it, contains an estimated 15 million tonnes of lithium. The California Energy Commission estimates that the geothermal reservoir lying below the Salton Sea can produce 600,000 metric tons a year of lithium carbonate.
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CTR announced in November 2021 that it had begun the drilling program at its Hell’s Kitchen Lithium and Power project in the Salton Sea region. The company plans to continue with construction throughout 2022.
CTR estimates that the Stage 1 Power part of the project will be complete in 2023, ready to generate 49.9 MW of energy. CTR expects the Stage 1 Lithium part to be ready by 2024. At this stage, the project will produce an estimated 20,000 tonnes of lithium carbonate equivalent (LCE) per year.
CTR plans to expand throughout the latter half of the decade, hoping to operate on close to 7,300 acres of land as more of the Salton Sea dries up. The company says that the Hell’s Kitchen project could deliver up to 300,000 tonnes of LCE per year at capacity. The total energy capacity of the project is an estimated 1,100 MW.
What are the problems Controlled Thermal Resources tries to solve?
CTR is attempting to generate renewable energy while simultaneously extracting lithium sustainably. But generating renewable energy from geothermal resources isn’t the hardest part. Geothermal plants are already generating power in the Salton Sea region. CTR’s leadership team has developed and managed large-scale renewable energy projects there for more than two decades.
It’s sustainable lithium extraction from geothermal brine that poses a greater challenge.
CTR’s process promises several benefits over the traditional methods of lithium extraction. The two conventional methods for extracting the metal — open-pit mining and evaporation ponds — are not very environmentally friendly. Open-pit mines create a large physical footprint and produce large amounts of tailings. Evaporation ponds also leave a sizeable footprint and produce salt waste that can be toxic.
CTR’s process has a smaller physical footprint with no evaporation ponds and will be powered by renewable energy. However, CTR’s geothermal brine lithium process has never been tested at a commercial scale. Here is how it would work:
- Geothermal brine rises to the earth’s surface by the force of its own pressure;
- The brine is separated into steam and concentrated brine;
- The steam drives a turbine to create 100% renewable energy;
- A minerals facility then processes the steam and concentrated brine to produce lithium carbonate;
- The remaining brine and steam are then returned to the earth;
- The renewable cycle continues.
CTR is also not alone in its ambitions to develop a project like this in the Salton Sea region. Warren Buffett’s Berkshire Hathaway and EnergySource have been looking at ways to add direct lithium extraction technology to existing power plants. The plan, like CTR, is to process lithium while generating electricity simultaneously.
Is Controlled Thermal Resources a publicly traded company?
CTR is a private company. It does not have publicly traded shares available and currently has no publicly announced plans to go public.
The company does not reveal who its investors are, but it did receive a $4.5 million grant from the California Energy Commission (CEC) in June 2020. In July 2021, the company received a multimillion-dollar investment from General Motors (GM). GM claims that it was the first company to invest, giving it first rights to the lithium produced by the Hell’s Kitchen project.
However, CTR may need to secure more financing to fund the construction of its lithium and geothermal plant, estimated to cost about $520 million.
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Can you buy Controlled Thermal Resources stock?
You can’t buy CTR stock on an exchange because it’s not publicly traded. However, accredited, sophisticated investors may be able to invest via private placement by reaching out to the company.
Also, if you want exposure to the lithium industry, there are several publicly-traded options in which you can invest.
How to invest in alternatives to Controlled Thermal Resources stock
CTR is a U.S.-based company focused on lithium extraction and production. Here are a few North American lithium producers that are publicly traded:
- Piedmont Lithium (PLL), an emerging U.S. lithium producer developing hard rock lithium assets in the U.S., Canada, and Ghana;
- Lithium Americas (LAC), a Canadian lithium company developing lithium mining projects in the U.S. and Argentina;
- Standard Lithium (SLI), a Canadian lithium company developing a processing technology that may significantly reduce the time it takes to extract lithium from brine;
- Rock Tech Lithium (RCKTF), a Canadian lithium startup working on projects to produce lithium specifically for EV batteries
NOT INVESTMENT ADVICE. The content is for informational purposes only; you should not construe any such information as investment advice.