A TECHNOLOGY body has secured a deal to support a burgeoning steelmaker.

The Materials Processing Institute (MPI), near Middlesbrough, is working with British Steel.

Bosses say the five-year agreement will see MPI provide research and development for British Steel’s rail and construction goods.

British Steel, formerly Tata Steel’s Long Products division, is owned by Greybull Capital after the investor bought the business from the Indian company.

Officials previously pledged a £400m package to support day-to-day operations, which include the Teesside Beam Mill, near Redcar, a special profiles plant in Skinningrove, east Cleveland, and a Darlington finishing base.

Chris McDonald, MPI chief executive, said the partnership provides a welcome tonic for the region’s steel sector after it was rocked by thousands of job losses last year when Redcar steelmaker SSI UK collapsed into liquidation and Caparo Industries’ Hartlepool forge closed.

He said: “After what has been a difficult year for the industry, we can see opportunity and confidence for investors in UK steel manufacturing.

“We have a long track record in developing technology and world-leading expertise and look forward to using our knowledge to support the development of British Steel to ensure it remains profitable and produces high-quality steel.”

Greybull bought the former Long Products operation for £1 and says the division, which employs nearly 900 people across the North-East and York, has already turned a profit.

John Dale, British Steel’s technical director, said the MPI agreement will provide greater confidence going forward.

He added: “This collaboration will support the continued development of our products and productivity, keeping UK steelmaking at the forefront of the international market.

“The future looks increasingly bright for British Steel.”

The MPI, which previously launched a commercial steelmaking operation to meet customers’ requirements for smaller and unique orders, has been hailed as a potential saviour to spearhead the steel sector’s revival.

Redcar MP, Anna Turley, and Tom Blenkinsop, representative for Middlesbrough South and east Cleveland, want the MPI to join the Catapult programme, saying it could encourage industry investment and give the region a platform to rebuild after SSI UK.

The North-East already has Catapult hubs - Government-backed centres of excellence - that focus on innovation in the digital, satellite and high-value manufacturing sectors.

Greybull bought Long Products after Tata announced plans to sell its loss-making UK assets in the midst of lower prices, increased imports and higher energy costs.

However, uncertainty still remains over its 600-job Hartlepool pipe mills, with a number of interested parties understood to be plotting bids for its plants.