Operation Vulindlela is reviving SA’s coal export corridor

Clarence Tshitereke

South Africa’s logistics system, long constrained by state monopoly structures and deteriorating infrastructure, has reached a decisive reform moment. At the centre is Operation Vulindlela, the joint government-business initiative established to accelerate priority structural reforms, including the unbundling of Transnet and the introduction of private sector participation across strategic freight corridors.

Open-access rail reforms and tariff determinations are beginning to ease network constraints. The clearest evidence now appears not only in government reporting, but also in the operational disclosures of South Africa’s major bulk commodity exporters.

For years, South African freight rail was dominated by vertical integration within Transnet Freight Rail (TFR), which controlled both infrastructure and train operations. This model contributed to underinvestment, operational inefficiencies, and declining performance on key trade corridors, particularly the North Corridor serving Richards Bay Coal Terminal (RBCT).

Operation Vulindlela’s response has been to support an open-access framework, separate Transnet’s infrastructure and operating functions, and work with the Interim Rail Economic Regulator on equitable access tariffs. The objective is to lower entry barriers, enable private train operating companies and allocate scarce corridor capacity more efficiently.

Thungela Resources’ latest six-month interim performance illustrates the early commercial impact. Export equity sales rose 6% to 8.5 million tonnes, adjusted EBITDA increased by 91% and headline earnings per share rose by 150%, enabling the board to nearly treble its interim dividend to R5.50 per share. state-led reform, market liberalisation, and improved rail access are translating into stronger export performance through the RBCT.

These gains are significant because they reflect not only internal asset productivity but also improved logistics capacity on the corridor to RBCT. Thungela attributed part of its expansion to stronger TFR capacity utilisation, which allowed producers to move larger volumes by rail, ease mine-gate bottlenecks and lift export throughput.

The broader rail reform agenda also demonstrates the value of a more contestable market.

Under milestones tracked by Operation Vulindlela, the allocation of slots to 11 private operators across 41 strategic routes has begun to reduce dependence on a single overburdened operator. This shift has supported a steady improvement in TFR’s annualised run rate, from 51.9 million tonnes in 2024 to 56.8 million tonnes in 2025 and 59.9 million tonnes in the first half of 2026. Exxaro Resources has similarly noted that TFR delivered 30.95 million tonnes to RBCT in the first half of 2026, an annualised rate of 60 million tonnes.

The Phase II 2025/26 Q3 Progress Report shows that this reform momentum is moving from policy design into implementation. Transnet recorded a 4.4% increase in rail volumes for the six months ended September 2025, continued its locomotive fleet renewal programme, and advanced preparations for seven of the eleven private train operators to begin operations in early 2027. The 25-year concession for Durban Container Terminal Pier 2, expected to unlock more than R11 billion in private investment, further signals a broader shift toward deeper private sector participation in trade-enabling infrastructure.

If Transnet continues pushing capacity toward 80 million tonnes and beyond, capitalised producers could absorb surplus export entitlements and support additional regional routes such as the Waterberg C-line serving major operations line Exxarro’s Grootegeluk mine. This would raise system-wide capacity without relying solely on immediate large-scale public expenditure.

The implications extend beyond volume growth. In capital-intensive coal mining, constrained export channels create costly stockpiles, quality degradation, higher Free on Board costs and delayed capital deployment.

By easing rail constraints to RBCT through direct access and corridor coordination, exporters gain greater confidence to invest in asset extensions, maintain higher-margin product specifications, and return capital to shareholders.

Third-party capacity allocations also create positive spillovers for the regional supply chain. When large producers operate near mine-gate capacity, surplus rail slots can help smaller and junior miners access export markets.

This improves train payload efficiency, spreads fixed network costs over larger aggregate volumes and broadens market access for emerging black-owned mining enterprises. In this way, structural reform advances both efficiency and inclusion.

For junior coal miners, improved freight rail could be especially transformative.

Smaller producers are often unable to secure reliable, affordable access to export channels because they lack the balance sheets, long-term contracts, and logistics leverage of larger mining houses.

A more open and better-performing rail system would allow juniors to aggregate volumes, share train capacity and access RBCT or alternative export routes on more predictable terms. This could reduce reliance on costly road haulage, improve mine economics, and make marginal deposits commercially viable. Over time, improved access would support black-owned entrants, regional employment, and a more competitive coal export value chain.

The launch of Phase III of the Government-Business Partnership by President Cyril Ramaphosa extends this logic by positioning mining as a central growth driver. The Minerals Council South Africa welcomed the partnership’s focus on mining, arguing that unlocking delayed projects, restoring investor confidence and improving logistics can convert reform progress into measurable economic gains.

Phase III targets sustained GDP growth above 3% a year and one million additional jobs by 2030, at a time when 2025 growth was only 1.1% and unemployment stood at 33.6%. It also builds on earlier gains, including the end of loadshedding, improved port performance and accelerated Operation Vulindlela reforms.

For mining, the priority is to unblock an estimated R50 billion in private capital currently held back by regulatory, energy and rail constraints. If released, these projects could support mine expansions, processing capacity, junior miner participation, export growth, and broader industrial activity.

If Phase III reforms are implemented at pace, mining’s direct contribution to GDP could rise from the current 6% before 2030. The most realistic uplift would come from improving rail reliability, shortening permitting timelines, and expanding beneficiation linked to platinum group metals, coal, iron ore, manganese, and critical minerals.

Even a one to two percentage point increase in mining’s GDP share would materially strengthen exports, tax receipts, fixed investment, and regional employment. This would also crowd in suppliers, engineering firms, logistics operators, and manufacturers, making mining a wider platform for industrial growth.

The alignment between Operation Vulindlela’s policy execution and Thungela’s financial outcomes demonstrates how targeted reform in network industries can unlock economic value. By opening monopolistic logistics systems to more disciplined access arrangements and private participation, South Africa is beginning to convert supply constraints into export growth through assets such as RBCT.

The test now is execution discipline.

For the Minerals Council and its members, the reform agenda must move beyond announcements into bankable delivery: predictable rail access, faster licensing, reliable electricity, competitive ports, and a regulatory environment that supports long-term capital commitments.

Mining projects typically require multi-year planning horizons, so confidence is built when government decisions are consistent and implementation milestones are visible. If the partnership can align public infrastructure reform with private investment plans, South Africa can shift from stabilisation to expansion, using mining as a catalyst for exports, industrialisation, and inclusive job creation.

Although the full operationalisation of the Transport Economic Regulator and broader private sector integration remains a work in progress, the early results are tangible. Operation Vulindlela has shifted South Africa’s logistics reform agenda from aspiration to execution, showing how targeted regulatory change can unlock sustainable economic growth.

Dr Tshitereke, an honorary professor at Unisa’s Thabo Mbeki School of Public & International Affairs, is an employee of the Department of Minerals & Petroleum Resources – writing as part of the Government Communications and Information System.