biofuels company D1 Oils has signed a deal backed by the Philippines government.

The agreement is to develop plantations of jatropha trees that will restore land damaged by mining. Teesside-based D1 will harvest the trees and refine its vegetable oil into biodiesel.

Philip Wood, chief executive, said: "We see the mining industry as a key partner for D1 Oils.

"The need to restore degraded land around mines provides us with a great opportunity to demonstrate the potential of jatropha to rehabilitate land, while producing a source of green energy for local communities.

"The project will serve as a model for other mining remediation efforts throughout the world."

The deal, with Philippines mining corporation Atlas, will see D1 plant jatropha on land that has been damaged by Atlas operations.

The process, called bioremediation, involves planting jatropha to replace lost nutrients in soil polluted or eroded by mining.

President Arroyo planted the first seedling at the project site in Toledo, in Cebu province.

The first stage of the scheme will be a five to seven-hectare farm. If that is successful, jatropha will be planted on 7,000 hectares of land to produce fuel for power generation at mining facilities.

President Arroyo is also supporting D1 Oils' plan to plant jatropha on coconut plantations to help meet the government's biofuels targets.

The Philippines agreement is the latest in a series of partnerships across the globe.

Last month, D1 won £15m backing from the State Bank of India, allowing Indian farmers to plant jatropha to sell back to D1.

The company is also looking for North-East companies to build two refineries on Teesside.