UPDATE: The bankruptcy court reports that Esmark Steel Group pledged $5.15 million in cash to buy the Yorkville mill from RG Steel Wheeling. Earlier reports in the local media put the pricetag at $4.7 million. A back-up bid of $4.9 million was made by demolition contractor Frontier Industrial Corp.

It’s hard to believe that as recently as 2008 the Wheeling-Pittsburgh Steel Co. sold for $1.25 billion.

Tonight, records coming from the U.S. Bankruptcy Court confirm that the once-proud emblem of Ohio Valley industrial might was sold in scraps – and at scrap prices – as part of the auction of RG Steel’s assets.

The owner of Baltimore’s Sparrows Point mill, whose fate awaits secret negotiations among several possible bidders, agreed to sell its Mingo Junction, Ohio, unit for $20 million to Frontier Industrial Corp., a demolition and recycling company in Buffalo, N.Y.

This is a shockingly low price for an integrated mill that features both a $100-million-plus electric arc furnace installed in 2005 and an extra-wide 80-inch hot-strip mill, something Sparrows Point desperately needs.

Frontier will scrap the plant, but there is no mention of what it will do with the modern equipment. Presumably the furnace and rolling mill will be sold to another steel entity, operating either in the U.S. or overseas, at a good price.

Quintessential Mill Town

Rising up on a steep hillside from the mill, Mingo Junction is a quintessential steel town of modest bungalows, quaint churches and now mostly empty stores fronting Commercial Street and the mill gates.

Generations of workers passed through those iron gates. The 1978 Academy-Award-winning movie The Deer Hunter filmed key scenes in the town’s bars and fraternal lodges.

The plant has been idle since 2009, first under Severstal (which paid the $1.25 billion for Wheeling-Pitt) and then during the short reign of RG Steel.

RG Steel management rejected a slightly higher bid of $20.7 million by HRE Mingo LLC because it included additional assets that exceeded the $700,000 difference between the two bids. The auction sale is subject to approval by Bankruptcy Judge Kevin Carey at an August 8 court hearing.

The company’s Wheeling, W.Va. plant, about 20 miles down the Ohio River, will also permanently close.

Mini-mill steel producer Nucor Corp. was awarded the right to purchase its equipment and “intellectual property” (it was an important producer of rust-proof decking and highway products) for $7 million. There were no other bidders.

The Martins Ferry unit of Wheeling Pitt, which makes galvanized steel, will be sold to W. Quay Mull and Joseph N. Gompers for $2 million. Mull owns a small steel company and says he will keep Martins Ferry open.

Ohio Coatings Co. was sold to Esmark Steel Group for $1.5 million, contingent on the sale of RG’s Yorkville plant to Esmark.

Esmark has reportedly purchased Yorkville for $4.7 million and is expected to continue tinplate production there, according to local media reports.

Confirmation of the deal and pricetag has not yet been placed on the bankruptcy court’s docket.