MELBOURNE - Australia's Mineral Resources said on Monday it intends to develop a lithium processing hub in the Goldfields region of Western Australia after its buyout of Poseidon Nickel's Lake Johnston nickel concentrator plant and mining rights.

Billionaire Chris Ellison who leads the diversified miner has been vocal about his plans to centrally process lithium ore mined in the region from third parties and from miners it has a stake in, in a "hub and spoke" model.

Australia ships out around half of the world's supply of the battery raw material and the move is another step in the magnate's plan to dominate the lithium sector where it already owns three hard rock mines.

“We intend to bring our expertise in spodumene production to Lake Johnston, which has the potential to service projects throughout the world’s most prospective region for lithium," Ellison said in a statement.

MinRes will convert the existing nickel plant to be able process the lithium into spodumene concentrate. It has not disclosed the capital costs of the project.

Ellison has said that further processing in Australia such as the battery grade lithium hydroxide that Tianqi and Albemarle make was too expensive in current conditions.

It will pay A$1-million on execution of the acquisition agreement, A$6.5-million on completion of the deal and a further A$7.5-million, a year after the completion.

The move comes as the Australian government considers a tax credit for companies that build processing facilities to boost the value of green energy minerals and as nickel miners have put projects on ice due to low prices.

"He'll either buy (spodumene) at the mine gate or toll it through the plant.. There will obviously be a number of different arrangements he can do with the juniors," said analyst Glyn Lawcock of Barrenyjoey in Sydney.

Ellison will be able to "clip the ticket" several times, by charging for opportunities such as mining, crushing and transportation, Lawcock added.

Without a processing hub for third-party ores, much of the region's material would not be viable to process, Ellison has said.

MinRes has stakes in developers in the region including Global Lithium and Delta Lithium. But it lost out in its bid to buy Azure Minerals, which has a flagship project in the Pilbara region, to fellow billionaire Gina Rinehart and Chile's SQM late last year.