John Hume’s Platinum Rhino project has no viable business model – that bodes ill for big critter conservation
It’s been more than a week since an attempt by mega-game farmer John Hume to auction his Platinum Rhino breeding project of 2,000 white rhinos ended without attracting a single bid. Talks regarding offers made outside the online bidding process are said to be ongoing. But the project has no viable business model, and that is not good news for rhino conservation.
The apparent failure of John Hume to find a buyer for his 2,000 rhinos – the largest privately owned herd by far, and one that accounts for more than 12% of the world’s white rhino population – is potentially a crippling blow to the cause of big critter conservation.
The reason why the project has been unable to attract buyers or investors is probably simple: it does not have a viable business model in the current wildlife policy and economic environment. In fairness to Hume, he has not tried to sell it as a profitable business, but rather as a project that needs a wealthy philanthropist willing to burn a lot of cash for the cause of conservation. That would be someone like himself – but with deeper pockets.
The factors behind its poor investment case speak to the wider rhino industry, and the long-term implications for conservation are chilling.
As we have reported extensively over the past few years, private rhino ownership in South Africa has in many ways been a conservation success story, and Hume has been the leader of this pack.
About 8,000 rhinos are now in private hands in South Africa – perhaps 60% or more of the national herd, according to the Private Rhino Owners Association (Proa).
Four years ago, a Proa survey put the ratio at about 46% of a national herd that then numbered over 15,000.
Read more: Rhino conservation: the horns of a dilemma
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In 2010, according to estimates at the time by the International Union for Conservation of Nature (IUCN), South Africa had almost 19,000 rhinos and 4,000 – less than 25% – roamed private lands.
What has happened over the past 13 years is that state-run reserves, notably the Kruger National Park, have been overrun by a relentless wave of poaching to meet soaring Asian demand for rhino horn. This is emblematic of the wider failure of the South African state on many fronts.
But private owners, with the incentive and the means to protect a big, four-legged asset, have done a far better job of protecting their rhinos. The numbers simply speak for themselves.
Private game farmers for years acquired or invested in rhinos for a range of reasons. Game viewing and trophy hunting were among these, but breeding could also deliver a return if a herd produced calves for resale to other owners. This was not just the case for rhinos, but also for other game species such as Cape buffalo and sable antelope.
But that bubble – and a potential source of a return on investment – has long since burst. Game prices in general came under pressure during the drought linked to the last El Niño, which saw feed costs soar, while the subsequent lockdowns to contain the pandemic scorched the sector’s profits further.
For rhino owners, these trends coincided with escalating security costs to protect their pachyderms from poaching. One consequence has been a growing concentration of rhino ownership in fewer hands.
A 2020 study in the peer-reviewed journal Conservation Letters found that 28% of South Africa’s private rhino owners were disinvesting in the species. Pointedly, it also found that the price fetched by live white rhinos at auction had fallen 75% between 2010 and 2020.
Read more in Daily Maverick: White rhino monopoly capitalism? 28% of SA’s private rhino owners are ‘getting out’ of the species
And now Hume, the biggest owner of all – with 25% of privately held rhino – is trying to disinvest, but can’t seem to find investors.
As a business model, Hume’s project is on par with Eskom’s – it simply sucks.
Selling rhinos is increasingly unviable. Fewer game farm businesses want the animals because of the rising security costs and the risks of losing animals to poachers, trends that are in turn depressing prices.
Some rhino owners, including Hume, have also built up stockpiles of horn over the years. Dehorning is an anti-poaching measure, but the horn that has been accumulated cannot be sold because a global ban on trade in the commodity has been in place since 1977.
As Jane Wiltshire of the African Wildlife Economy Institute at Stellenbosch University recently noted in this publication, an overwhelming body of evidence shows that the ban has not worked.
Read more in Daily Maverick: The global ban on the trade in rhino horn does not, and will not, work
This brings us back to the Platinum Rhino project. A legal trade in horn would probably make it viable as a business, as would thriving demand for live rhinos by other private owners, state reserves that were properly managed and liquid, or NGOs involved in “rewilding” efforts in other range states.
But the policy, security and economic climate have all combined into a perfect storm that has swept aside almost all incentives for private rhino ownership in South Africa.
Domestic policy is unclear, with a recently adopted White Paper on biodiversity still to go through a long and winding implementation process with stakeholder consultation.
Meanwhile, commercial farmers remain concerned about the long-term risk of land expropriation in the wake of decades of government failure to address glaring disparities in ownership.
This state of affairs may explain why a billionaire with cash to throw around has not stepped up to the plate. Such a philanthropist, with no worries about the costs, would presumably want to maintain and grow the herd in the interests of conservation and to support rewilding initiatives elsewhere. But even that “return” on investment is not guaranteed at the moment.
These clouds do not just hang over Hume’s project – a “captive breeding operation” that does not cater to game viewing or trophy hunting tourists. They shroud the entire sector in the mists of uncertainty.
If it is the end of the line for Hume’s project at a time when smaller private rhino owners are also feeling the strain, it clearly bodes ill for the conservation of the species and wildlife more broadly.
A recent assessment of the conservation contribution of Hume’s project by the IUCN’s African Rhino Specialist Group was hardly a ringing endorsement, saying “that rhino conservation is not simply just about the total number of rhinos”.
But among the issues raised are ones that speak directly or indirectly to costs – and hence the business model.
“The natural capital of southern white rhino within the Platinum Rhino herd likely has significant conservation value for potential rewilding options. Options for rewilding, however, can only be fully assessed if consideration is paid to trade-offs against purchase costs of rhinos sourced from Platinum Rhino, the costs and constraints in rewilding semi-intensively bred rhinos, and the opportunity costs pertaining to other rhino conservation opportunities that may involve similar annual expenditure,” it says.
The assessment also pointedly notes that the project has “built up significant biological assets in the form of about 2,000 southern white rhinos”. Indeed, the private sector as a whole has built up “significant biological assets” and now has more rhinos than South Africa’s mismanaged and graft-ridden state reserves.
Yet the business or investment case for rhino ownership is fast fading, and that could lead to a reversal of this trend.
Conservation may not just be about numbers, but numbers do also literally count. And any future hopes of reintroducing the species to former range states and territories – with policies and measures in place to protect them from poaching or habitat loss – will rely on adequate numbers.
It may be time for a rethink of policies, including the failed global ban on the commercial trade of rhino horn.
Without a business model that can provide a return on investment, or a clear policy environment to attract wealthy donors uninterested in making a profit, the fate of more than Hume’s herd is hanging in the balance on the horns of this dilemma. DM/BM