NUA Strategy for Mining and Metals Industry Employees (Nucor, Freeport-McMoRan, Alcoa)

Steelworkers, copper miners, and aluminum smelter employees are not the most visible NUA audience — but they are among the most overlooked. Long-tenure employees at Nucor Steel, Freeport-McMoRan, and Alcoa Corporation have accumulated employer stock over 25–35-year careers, and the cyclical nature of commodities has twice compressed cost bases to generational lows — once during the 2008–2009 financial crisis and again during the 2015–2016 commodity crash. A Nucor steelworker who averaged contributions into the Nucor Stock Fund from 2015–2020 at a blended $40–$70/share now holds shares at $254/share¹ — ratios of 3.6:1 to 6.4:1 on those contributions. A Freeport-McMoRan employee who contributed through the January 2016 copper trough (FCX briefly traded at $3.52/share²) and continued contributing through recovery now holds a position that looks nothing like its cost basis. The NUA opportunity is very large for these employees — and almost entirely missed by generalist advisors who focus the NUA conversation on finance, tech, and healthcare sectors. This guide covers the sector's top four cases: Nucor Steel, Freeport-McMoRan, Alcoa Corporation, and a brief look at Steel Dynamics and Cleveland-Cliffs.

Why metals and mining employees are prime NUA candidates

Three structural features of careers in steel, copper, and aluminum produce favorable NUA conditions:

• Long average tenure and cyclical price compression. Steelworkers and miners frequently spend their entire careers at a single company — 25 to 35 years is common. Employer match and profit-sharing contributions are made every year of that career, including during commodity downturns when stock prices hit generational lows. Those low-basis vintages now carry the most dramatic appreciation, and they are sitting in the same plan as the recent higher-basis contributions.
• Profit-sharing plans that contribute employer stock directly. Nucor's plan structure is the clearest example: the Nucor Corporation Profit Sharing and Retirement Savings Plan includes a Nucor Stock Fund as a plan investment option, and Nucor's profit-sharing employer contributions have historically funded large NUE balances in participant accounts.³ Unlike a simple 401(k) where the employer match is a fixed cash deposit, Nucor's profit-sharing contribution fluctuates with steel-cycle earnings — meaning participants received large NUE share contributions in boom years and smaller ones in bust years, creating a naturally cost-averaged position.
• No defined-benefit pension at many companies. Nucor famously has no traditional pension plan — it replaced it with the profit-sharing plan in the 1970s. This means a 30-year Nucor steelworker's primary retirement asset is often the profit-sharing plan, dominated by NUE shares. When that entire balance consists of heavily appreciated employer stock, the NUA election is not a minor tax optimization — it is the difference between paying 22% ordinary income tax and 15% long-term capital gains on hundreds of thousands of dollars of appreciation.

Company summary table

Nucor Steel (NUE): the profit-sharing advantage

Nucor Corporation is the largest steel producer in the United States by volume and, for NUA purposes, the standout case in the metals sector. Its plan — the Nucor Corporation Profit Sharing and Retirement Savings Plan — is a tax-qualified §401(a) defined-contribution plan that covers approximately 20,000 employees and uses Fidelity NetBenefits as the recordkeeper.³ The plan includes a Nucor Stock Fund as an investment option, and Nucor's employer profit-sharing contributions — which vary with the company's profitability — have historically resulted in large NUE share accumulations in participant accounts.

Why the profit-sharing structure matters for NUA: Nucor has no traditional defined-benefit pension. Its compensation model ties pay to steel-cycle performance: base wages are deliberately below industry average, but bonuses (weekly production incentives, quarterly profit-sharing, and annual profit-sharing) can more than double effective compensation in strong years. The annual profit-sharing component — which can reach 10% or more of pre-tax earnings — flows into the retirement plan and has historically been allocated to the Nucor Stock Fund. This means a 30-year Nucor steelworker has accumulated NUE shares over three decades of profit-sharing contributions, with particularly low-basis vintages from the 2009, 2015, and 2020 downturns when steel-cycle earnings and share prices were both depressed.

NUE appreciation trajectory (verified prices):¹

• 2009 (financial crisis low): ~$20–$28/share
• 2012–2014: ~$40–$50/share
• 2015–2016: ~$36–$68/share (2015 close $40.30; steel-cycle trough then Trump-tariff rally)
• 2020 COVID low: $27.53/share (March trough)
• 2020 average: ~$45–$55/share
• 2026 current: ~$254/share (2026 year high $264.67)

Appreciation ratios by contribution vintage:

The practical implication: a 30-year Nucor veteran who has been contributing since the mid-1990s has a blended position with a very low average cost basis — often $40–$70/share — because the early-career contributions at $10–$30/share drag the average down sharply. The total NUA appreciation on a position of that size can easily reach $500,000–$800,000 for long-career employees with substantial profit-sharing accumulations.

Lump-sum distribution mechanics at Fidelity: Fidelity NetBenefits serves the Nucor plan. The in-kind stock distribution cannot be executed online — it requires a call to Fidelity's Workplace Investing line (the number on your NetBenefits page, not the retail 800-number). Request an "in-kind distribution of employer securities" and specify that you want NUE shares transferred in-kind to a Fidelity or external taxable brokerage account, not liquidated. Emphasize the December 31 same-tax-year deadline for the lump-sum distribution requirement: all balances from the plan must be distributed (transferred to taxable or rolled to IRA) before December 31 of the year you initiate. Initiate no later than November 1 to allow adequate processing time. See the Fidelity NUA mechanics guide for the full call script and portal steps.

Cost basis verification: Nucor's profit-sharing contributions are credited to participant accounts periodically (typically annually). Over a 30-year career, the plan may hold hundreds of separate lot records. Request a lot-level transaction history (also called "investment history" in NetBenefits) that shows the date, number of shares, and per-share plan cost for every employer stock contribution and reinvestment. This is the document that drives your NUA tax savings calculation. Do not use the NetBenefits summary page — it typically shows a blended average cost basis, not the lot detail needed for partial NUA lot selection.

North Carolina state tax note: Nucor is headquartered in Charlotte, NC. North Carolina has a flat income tax rate of 5.25% that applies to both ordinary income and long-term capital gains at the same rate — the state does not recognize a preferential LTCG rate. Nucor employees living in North Carolina receive federal-only NUA benefit: the federal capital gains savings is large, but there is no state spread between OI and LTCG rates. Employees living in Texas (Nucor's Jewett, TX Gallatin, and other Texas facilities), South Carolina (Berkeley Steel Division), or other no-income-tax or low-LTCG states capture the full advantage. See the state table below.

Freeport-McMoRan (FCX): the commodity-crisis case

Freeport-McMoRan is the world's largest publicly traded copper producer, with major operations in the Grasberg mine in Indonesia, the Morenci and Bagdad mines in Arizona, and the Cerro Verde mine in Peru. US-based employees — primarily at Arizona headquarters, the Arizona mining operations, and the Texas Gulf Coast copper refinery (El Paso) — may hold FCX common stock inside their 401(k) plan.

The NUA case for Freeport-McMoRan is driven almost entirely by the 2015–2016 copper price collapse. FCX's stock experienced a catastrophic decline as copper prices fell from $3.30/lb in mid-2014 to under $2.00/lb by January 2016, FCX simultaneously carried heavy debt from its 2012–2013 acquisition of oil-and-gas assets, and the market feared a liquidity crisis. FCX briefly reached an all-time closing low of $3.52 per share on January 20, 2016.² The full 2015–2016 trough range was approximately $3.52–$14/share.

FCX appreciation from crisis-era basis:

• 2015 year-end close: $6.77/share
• 2016 crisis low: $3.52/share (January 20, 2016)
• 2016 year-end close: $13.19/share
• 2019–2020: $8–$14/share (COVID trough)
• October 2026 current: ~$73.68/share (52-week range $38.54–$80.24)⁴

What this means for NUA:

The dramatic bifurcation between crisis-era and recent contributions makes FCX a classic partial NUA lot-selection case. Employees with a blended account spanning 2014–2026 may have an unimpressive overall ratio (blended average might be $20–$30/share → 2.5:1 to 3.7:1) but a compelling opportunity if they can isolate the 2015–2016 low-basis lots for NUA and roll the higher-basis recent contributions to an IRA.

Plan type and in-kind distribution: Verify with Freeport's HR (benefits.freeport.com or your site HR contact) that (1) your plan is a §401(a) qualified plan, (2) FCX common stock is available as an investment option, (3) the plan allows in-kind distribution of employer securities, and (4) your plan holds actual FCX shares rather than units in a commingled stock fund. The distinction matters: shares can be distributed in-kind for NUA; units in a commingled fund may not qualify. This is the first verification step before modeling anything.

Arizona state tax advantage: Freeport-McMoRan is headquartered in Phoenix, Arizona. Arizona imposes a 2.5% flat rate on long-term capital gains — substantially lower than Arizona's ordinary income rate (2.5% flat for most income levels in 2026). For FCX employees resident in Arizona, the state LTCG rate is the same whether you hold in an IRA or NUA, so the NUA benefit is primarily federal. However, for employees based in Texas (El Paso refinery employees cross-border or TX-based), Wyoming, or Nevada — all with no state income tax — the full federal + state advantage applies. New Mexico (some Freeport Southwest operations) taxes LTCG as ordinary income (top rate ~4.9%), so NM-based employees have federal-only benefit.

Alcoa Corporation (AA): the spin-off basis mechanics

The current Alcoa Corporation (NYSE: AA) — a pure-play aluminum mining, smelting, and refining company — was created on November 1, 2016, when the original Alcoa Inc. separated into two independent public companies.⁵ The separation works as follows, and it creates dramatically different NUA situations depending on which side of the split an employee ended up on:

The 2016 separation mechanics:

• Original Alcoa Inc. shareholders received 1 share of new Alcoa Corporation (AA) for every 3 shares of Alcoa Inc. they held at the record date.
• Alcoa Inc. retained the aerospace and automotive components business and renamed itself Arconic Inc. (ticker ARNC). Arconic later split again in April 2020, with the forged-products and cast-products business becoming Howmet Aerospace (HWM) and the aluminum rolling products business becoming a new Arconic Corp (ARNC).
• Tax basis allocation: The aggregate basis of pre-separation Alcoa Inc. shares was allocated between the two companies based on their relative fair market values at separation — 73.14% to Arconic (now Howmet Aerospace / new Arconic) and 26.86% to new Alcoa Corporation.⁵

What this means for Alcoa Corporation (AA) employees' NUA:

If you are an employee of the current Alcoa Corporation (the mining/smelting side) and your 401(k) plan holds AA common stock, your employer securities for NUA purposes are AA shares. The key is your cost basis:

• Employees who joined Alcoa after November 1, 2016: Your AA basis is simply the plan's purchase price for AA shares after the IPO. AA opened at approximately $24–$27/share on November 1, 2016 and currently trades at ~$43.17/share.⁶ This produces a ratio of approximately 1.6:1 to 1.8:1 on post-2016 contributions — generally below the NUA breakeven for employees in the 22%+ bracket. However, the COVID trough (AA briefly fell to ~$5–$8 in March–April 2020) followed by recovery to current levels creates 5:1 to 9:1 ratios for contributions made during that specific window.
• Long-tenure Alcoa employees who held shares through the 2016 separation: If the plan held pre-split Alcoa Inc. shares that converted to AA shares at separation, the plan's cost basis for those converted AA shares is calculated from the original pre-split purchase price, allocated at the 26.86% ratio. This is where the NUA math gets compelling: old Alcoa Inc. shares purchased at $8–$17/share during the 2009–2016 commodity downturn carry an allocated AA basis of approximately $2.15–$4.57 per original share — or, translated to the 1-for-3 conversion, approximately $6.45–$13.71 per new AA share. At $43.17/share today, that represents ratios of 3.1:1 to 6.7:1 on those pre-split lots.

Howmet Aerospace (HWM) and new Arconic (ARNC) — a note for former Arconic employees: If you are an employee of Howmet Aerospace (the aerospace components business) or the new Arconic Corp (aluminum rolling), your employer securities are HWM or ARNC respectively — not AA. The basis allocation for those shares is 73.14% of pre-split Alcoa Inc. cost, subject to further allocation at the April 2020 Howmet/Arconic split. These chains of corporate events require careful basis tracing. An advisor who specializes in NUA with corporate-action experience is essential here.

Steel Dynamics, Cleveland-Cliffs, and other metals companies

Steel Dynamics (STLD) is a Fort Wayne, Indiana-based mini-mill steel producer — the second-largest domestic steel company after Nucor. Its compensation philosophy is similar to Nucor's: performance-based pay, no traditional pension, and 401(k) plan with employer matching. STLD shares have appreciated strongly from the 2015–2020 trough levels (approximately $12–$25/share) to current prices. Long-tenure employees who contributed through the pandemic trough and the steel-cycle rally of 2020–2022 may have meaningful NUA ratios. Verify your plan's recordkeeper, confirm in-kind employer stock distribution is available, and request lot-level basis records before modeling. Indiana's flat 3.05% income tax applies to both OI and LTCG at the same rate — NUA benefit is federal-only for IN-based employees.

Cleveland-Cliffs (CLF) is a more complex situation. Cleveland-Cliffs was originally an iron ore pellet producer, but it acquired AK Steel in March 2020 and ArcelorMittal USA in December 2020 — transforming into an integrated steel company. Former AK Steel employees whose plan assets were converted to CLF shares face two questions: (1) Does the conversion preserve the original AK Steel basis for NUA purposes (basis carries through tax-free exchange, but the transaction must qualify under IRC §368 or §1036 for this to apply — verify with your plan), and (2) CLF's stock has been highly volatile since the acquisitions, ranging from $2–$35 in 2020 to current prices that vary significantly with the steel cycle. Run the numbers on your specific basis and CLF's current price before assuming NUA applies.

Newmont (NEM) and Barrick Gold (GOLD) — For gold mining employees: both Newmont and Barrick Gold are major gold producers with NYSE-listed shares, but their stock appreciation from pre-2020 levels has been modest relative to copper and steel (gold equities have not outperformed the metal itself recently). Verify your current cost basis against the current share price before modeling NUA. The NUA opportunity exists if the ratio supports it — but these are not the high-confidence cases that Nucor and FCX represent.

State tax table for metals and mining hub states

The key state insight for metals workers: Most metals and mining companies have a significant portion of their workforce in Texas, Tennessee, Nevada, and Wyoming — states with no income tax — as well as in manufacturing-intensive states like North Carolina, Indiana, and Kentucky where LTCG and ordinary income are taxed at the same rate. For workers in no-income-tax states, the NUA advantage is both federal and state. For most other workers, it is federal-only — but that federal savings can still be $70,000–$200,000+ depending on position size and ratio.

Worked example: Nucor steelworker, Jewett TX

Marcus Webb, 62, is a 30-year production supervisor at Nucor Steel Texas LP in Jewett, TX. He is separating from service to retire and considering the NUA election on his Nucor Profit Sharing and Retirement Savings Plan account.

Marcus's plan account:

• NUE shares: 3,500 shares
• Average cost basis: $42/share (blend of contributions from 1996–2026; early 1990s contributions at $10–$20/share drag the average down significantly)
• Total plan cost basis: $147,000
• Current FMV: 3,500 × $254 = $889,000
• NUA appreciation: $889,000 − $147,000 = $742,000
• Overall ratio: 6.0:1

His situation: MFJ, spouse retired. Texas — no state income tax. Marcus has no DB pension (Nucor doesn't have one). His retirement income will be Social Security starting at 65, plus investment income. In the NUA election year (2026), his only income is the $147,000 cost basis distribution from the profit-sharing plan.

NUA election year (2026) — ordinary income tax on $147,000 cost basis:

• Gross income: $147,000
• Less 2026 MFJ standard deduction: $32,200 (IRS Rev. Proc. 2025-32)
• Taxable income: $114,800
• Tax: 10% × $24,800 ($2,480) + 12% × $76,000 ($9,120) + 22% × $14,000 ($3,080)
• NUA-year federal tax: $14,680

Selling NUA stock — years 1–3 before Social Security (pre-SS window):

• Marcus has no other income for 3 years before claiming SS at 65
• He sells ~$120,000–$130,000 of NUE each year
• 2026 0% LTCG threshold (MFJ): $98,900 (IRS Rev. Proc. 2025-32)
• Each year: $130,000 LTCG − $32,200 std deduction = $97,800 taxable → entirely within 0% LTCG bracket
• LTCG tax for years 1–3: $0
• NUE sold: ~$390,000 of the $742,000 appreciation, tax-free

Selling NUA stock — years 4–5 with Social Security ($32,000/year SS):

• Marcus's SS provisional income: $130,000 LTCG + $16,000 (half SS) = $146,000 → above $44,000 MFJ threshold → 85% of SS included
• Taxable SS: $32,000 × 85% = $27,200
• Total AGI: $130,000 + $27,200 = $157,200; taxable: $125,000
• LTCG above 0% threshold: approximately $26,100 × 15% = $3,915/year
• LTCG tax for years 4–5: ~$7,830 total
• NUE sold: remaining ~$352,000

Total NUA-path federal tax: $14,680 + $0 + $7,830 = $22,510

IRA rollover comparison: Marcus rolls $889,000 to an IRA and withdraws gradually over 20+ years at an effective 22% average federal rate (mix of 12–24% brackets as RMDs and SS stack): $889,000 × 22% = $195,580 federal tax.

Federal lifetime savings: $195,580 − $22,510 = ~$173,000

Texas state tax savings: $0 both ways (no Texas income tax). The federal savings alone is $173,000.

Pitfalls specific to metals and mining employees

1. Rolling NUE or FCX shares to an IRA before modeling NUA. The permanent disqualification of the NUA election if any employer stock is rolled to an IRA (IRC §402(e)(4)(B)) applies immediately. At Fidelity, the default distribution option may be liquidate-and-roll — the representative must be specifically instructed to transfer NUE shares in-kind before any rollover is processed. If the shares are liquidated and the cash is rolled, the NUA election on those shares is permanently gone.
2. Missing the lump-sum distribution requirement for Nucor's combined plan. The Nucor Profit Sharing and Retirement Savings Plan is a single plan (profit-sharing + 401(k) savings component in one). The lump-sum distribution requirement means the entire balance from this plan — not just the NUE stock — must be distributed or rolled to IRA in the same tax year. Some participants mistakenly take the NUE shares in-kind but leave a small remaining cash or bond balance in the plan to be transferred "next year." That split disqualifies the entire NUA election.
3. Assuming the profit-sharing contribution was "employer stock" when it was actually cash invested in the stock fund. For NUA purposes, it does not matter whether the NUE shares were contributed by the employer directly as company stock or whether the employer's profit-sharing contribution was made as cash and then directed by the participant into the Nucor Stock Fund. Both result in NUE shares as "employer securities" qualifying for NUA treatment under IRC §402(e)(4)(E). The distinction that matters is that the shares must be actual Nucor Corporation common stock — not a mutual fund or commingled fund that holds NUE among many stocks.
4. Alcoa basis errors from the 2016 spin-off. Recordkeeper systems that recorded the market price of AA at the November 1, 2016 separation date as the basis for converted shares (rather than the allocated 26.86% portion of the original Alcoa Inc. cost) will understate the NUA opportunity. A $24/share recorded basis vs. the correct $6–$14/share calculated basis means you may be leaving $10–$18/share of tax-free capital gain on the table. Always cross-check the recordkeeper's AA basis against the official Alcoa basis allocation methodology before executing.
5. FCX plan-type confusion. Some Freeport-McMoRan employees may participate in non-qualified deferred compensation plans or non-401(k) arrangements that do not qualify for NUA treatment. Confirm with HR that your plan is a tax-qualified §401(a) profit-sharing or 401(k) plan before modeling. Only §401(a) plans qualify for NUA under IRC §402(e)(4).
6. Commodity-cycle timing creating a "reverse NUA" situation. During commodity downturns — when FCX or NUE are near cycle lows — the current FMV may be below contributions made at prior cycle peaks. This is rare for long-tenure employees with early low-basis lots, but recent (5-year) employees who contributed heavily at cycle highs may have a blended basis above current market value. In that case, NUA produces no benefit. Verify ratio before timing any election around commodity cycles.
7. State relocation before distribution. An employee who moves from North Carolina (5.25% OI = LTCG) to Texas (no income tax) after the qualifying event but before the stock is actually sold from the taxable account captures additional state savings on the NUA appreciation. The state where you reside when you sell the stock (not when you receive it) governs the state LTCG. This can be worth planning for employees near retirement who are already considering relocation.

Questions to ask your plan administrator

1. Is my plan a qualified §401(a) plan (401(k), profit-sharing, ESOP) — not a 403(b), 457(b), or nonqualified plan?
2. Does the plan hold actual employer stock shares (NUE, FCX, AA) as an investment option — not units in a commingled or mutual fund that holds company shares among many positions?
3. Does the plan allow in-kind distribution of employer securities (transfer of actual shares to a taxable brokerage, not liquidation)?
4. Can you provide a lot-level transaction history showing the date, number of shares, and per-share cost for every acquisition of employer stock in my account?
5. What is the December 31 processing deadline? What is the typical time from distribution request to in-kind transfer completion?
6. If I have a profit-sharing component and a 401(k) savings component, are they part of the same plan? Must both be distributed in the same tax year?
7. (Alcoa employees) What was the per-share basis assigned to Alcoa Corporation (AA) shares at the November 1, 2016 separation? Can you provide the transaction record showing that basis was allocated at 26.86% of the original Alcoa Inc. purchase price?