Building on a long history of collaboration, the University of Wollongong jointly with BHPSteel, has developed a strategy for strengthening the competitive position of the local steel industry. This strategy is based on the premise that a sustainable alliance between industry and university would help ensure that opportunities are created for the development of innovative and creative solutions to problems facing the steel business and its customers. Focussed research groups were founded in the Institute for Steel Processing and Products, University of Wollongong. These dedicated teams have built a specialised equipment infrastructure that is shared by university and industry researchers. This infrastructure is unique in Australia and is specifically tailored to the needs of the steel industry. As this infrastructure base has grown, BHPSteel's in house research and metallurgical organizations and the University have progressively started to eliminate costly duplication of equipment by sharing facilities. The Institute's major contribution to BHPSteel has been the enhancement of the business through multi-disciplinary collaborative research between BHPSteel and the University to gain a better understanding of the key technical issues facing the company. In addition, the Institute provides advanced education and training to BHPSteel engineers. Through these collaborative efforts, the Institute has contributed to the strengthening of the competitive position ofthe local steel industry in the world market. This model of interaction need not be confined to interaction within Australia, but can be extended to enhance the competitive position of the regional steel industry.