Thursday, March 16, 2023

Bargain of the year?


Michael - Alternate Thursdays

Here’s a deal. Something with a retail value of around $250 million dollars now on auction with starting bids at $10 million. But wait, there’s more. Every two years, you get another quarter billion! Unless you were born yesterday, you know there’s a big catch, and, of course, you’re right.

Platinum rhinos
Photo Daily Maverick

If I’d been asked where I would find the largest single owner of rhinos in the world, I would have plumbed for the iconic Kruger National Park that stretches over more than eight thousand square miles in the north east of South Africa. Although white rhinos became extinct in the area at the end of the nineteenth century, they were reintroduced in the seventies and have bred up very well indeed over fifty years. 

Still, I would have been dead wrong. The answer to the question about the largest population of rhinos in the world is a private farm owned by wealthy investor and self-styled rhino conservationist, John Hume. His land extends over 8,500 hectares and contains 2,000 rhinos. That’s probably around 10% of the world population of white rhinos (the least rare of the various species). It’s this farm that's going on auction. 

In fact, about 60% of white rhinos are privately owned. The cost and logistics of keeping them safe from poachers is beyond the efficiency and resources of government agencies such as the sprawling national parks.

The reason this is apparently such an amazing deal is because of the leverage. An adult white rhino costs around $30k in South Africa. Its horn weighs about 2kg. That’s worth around $250k - ten times the cost of the whole rhino - at the street value in Asia. The catch is that if you buy a rhino, the horn comes attached to it. You can cut it off if you like (if the rhino cooperates), you can even sell it in South Africa if you want to, but you can’t legally take it out of the country or sell it to someone who doesn't reside here. To prevent the extinction of all species of rhinos in the world, CITES has banned the trade in rhino horn. Thus essentially all the rhino horn traded in Asia is illegal and arises from poached rhinos whose horns were cut off the dead animals and exported illegally. South Africa is a signatory of the CITES agreement and enforces the export ban. However, there are loopholes. One is that you can get a licence to hunt a rhino on private land, and you'r allowed to take your trophy home. Of course, you may not then sell the horn, but once you are back in China or Vietnam…

John Hume
Owner of Platinum Rhinos

Hume has always argued strongly that the right way to handle the rhino horn trade for medicinal and recreational purposes in the East is to supply the demand in a legal controlled and humane manner. It’s not a ridiculous argument. Rhino horn is nothing more than compacted hair. It can be painlessly removed with the animal sedated, and it grows back in two to three years. That means that one rhino can supply on average 1kg of horn every year. Hume points out that this could be certified and supplied to the dealer in much the same fashion as the Kimberley Process ensures that diamonds supplied to consumers are not “blood diamonds.” He has a point. The counter argument is that the consumer market may just grow to absorb all the legal and illegal horn available thus putting more pressure on the rhino populations. After all, there are a lot of people in China and Vietnam…

Looking for investment...without success

We tried to investigate these issues in Dead of Night, our thriller featuring environmental journalist Crystal Nguyen as a US reporter investigating the rhino horn trade and the issues around it for National Geographic magazine. The questions are easy to ask, but harder to answer. Hume, who claims a life-long love of rhinos and a determination to prevent their extinction, came up with his answer in the form of his ranch and rhino breeding project financed by his own money. But the tide never turned in favour of commercial trade, and now at 81 he’s ready to throw in the towel as the bills mount. He wants to sell the ranch as an ongoing operation, complete with the state-of-the-art security system that has kept his rhinos alive. If he can’t get that $10 million starting bid at the auction, he says he will close the operation and sell off the pieces. Probably that will mean that many of the 2,000 rhino will end up as carcasses and powdered horn, legally or not.

Anyone out there want to own the world’s largest rhino population plus other wildlife on a large, pristine area of bush in South Africa? Be warned that the $10 million is only the down payment though. The ongoing running costs will be the issue. Maybe a crowd funding opportunity? Or maybe South Africa's president will throw in a few million. He’s into these sorts of things.

I’ll let you know in May after the auction closes.

Details of Platinum Rhinos and the auction

1 comment: