Fortescue's (ASX:FMG) next major hub development is expected to support the resumption of supplying higher iron grade hematite product options, Jarden said in a Thursday note.

The firm reported a robust start for fiscal year 2026, and it started to implement a revised hematite life-of-mine plan, underpinned by the inclusion of the recently acquired Blacksmith project. It seeks to maintain a low C1 unit cost profile and enhance capital efficiency.

The optimization involves a refinement in product mix, with West Pilbara fines, around 60% grade of iron, to be phased out, and a new 55% grade iron product to be introduced from fiscal year 2027, accounting for 5% to 6% of total hematite shipments anticipated.

The investment firm assigned an underweight rating on Fortescue and a price target of AU$16.