Bloomberg News

Rhino Poaching Threatens South Africa’s CEO-Owned Game Farms

April 20, 2012

For now private owners face the stark choice of protecting their rhinos or losing them to poachers. Photographer: Nadine Hutton/Bloomberg

For now private owners face the stark choice of protecting their rhinos or losing them to poachers. Photographer: Nadine Hutton/Bloomberg

Barry Lok grimaced as he gazed at the rotting carcass of his rhino bull, Kruger, lying under a tree on his farm northwest of Johannesburg. His heart had been pierced by a poacher’s bullet and his horn, worth its weight in gold, sawn off to be sent to Asia.

Kruger’s slaying spells more than the loss of a beast Lok loved for its “prehistoric beauty.” Lok, like private rhino owners including Nicky Oppenheimer, the richest South African, must now either pay heavily for more security or sell livestock and contribute to the species’ demise.

Rhino poachers in South Africa, home to about 90 percent of the world’s population of the endangered animals, are increasingly targeting private game owners as the level of rhino killing rises toward a record. Demand is rising in China and Vietnam, where rhino horn powder is believed to cure cancer. Last year 125 rhinos were poached from private farms in South Africa, a 52 percent increase from 2010.

“If we’re going to keep them here we’re going to have to protect them,” Lok, the 54-year old founder of chip-board company William Tell Holdings Ltd. (WTL), said in an interview at his 5,000-acre farm. “Bluntly, you’d have to sell the rhinos to pay for it. That’s not sustainable.”

The farmers need rhinos to run their hunting and game viewing businesses, which can charge a premium if their properties boast the so-called big five: rhinos, elephants, buffaloes, lions and leopards. Some, like Lok, breed the animals for sale to ranchers.

Product ‘Rhino’

By targeting rhinos, poachers are endangering conservation efforts while also threatening South Africa’s billion-dollar wildlife ranching industry. A 1970s law that gave farmers in the country ownership of wildlife on their land has led to the tripling of animal populations, according to Wildlife Ranching South Africa, a Pretoria, South Africa industry organization.

Revenue at game farms has risen by an average of 20 percent a year over the last 15 years. More than 10,000 private game farms now cover about 50.7 million acres, according to the official journal of Wildlife Ranching South Africa. That’s almost three times the land of government conservation areas.

The fear of future attacks has driven Lok to hire four guards at a cost of 40,000 rand ($5,114) a month in salaries, training and equipment.

“The rhino is worth more dead than alive,” said Pelham Jones, head of the Private Rhino Owners Association, which represents most of the country’s 400 rhino ranchers, in an interview this month. “The investor in product ‘rhino’ says, hey, this isn’t such a good idea anymore.”

Poaching Record

White and black rhinos were brought back from the brink of extinction in South Africa in the 1960s to a stable population of close to 20,000. Most of them are the larger white rhinos, which can weigh more than two metric tons.

The rise in killings dates to 2009, when South Africa imposed a moratorium on the domestic trade in horns to match an international trading ban, according to the Johannesburg-based Endangered Wildlife Trust, a non-profit organization. Until then horns and their products could be traded locally.

“The ban actually becomes the cause of the problem rather than the solution,” said Michael T’Sas Rolfes, an environmental economist who is advising the Department of Environmental Affairs on a study into lifting the ban, in a phone interview. It “is a disaster, because the price skyrocketed and it attracted organized crime.”

Vietnamese Demand

The number of rhinos poached so far this year is already double the total killed illegally in the eight years until 2007, according to government figures. Standing at 181 as of yesterday, it probably will hit a record this year. A rhino is poached in South Africa about every 18 hours, according to the Florida-based International Rhino Foundation, a non-profit organization.

Rising affluence in Southeast Asia -- Vietnam has expanded at an average of 7.2 percent annually over the last decade -- is stoking demand for rhino horn. The material, made from substances similar to hair, is usually ground into powder, mixed with water and drunk by those who believe it can treat ailments including cancer.

“If a person is sick, frequent intake will help them recover fast,” said Hoang Minh Nhat, a Hanoi resident whose boyfriend bought a horn for use by his ailing parents. “We are not really sure what helped them. We only know that, after a few months of taking rhino horn, their health improved.”

In Hanoi’s old quarter, traders sell grinding plates embossed with a picture of a rhino and quote varying prices for horns, which they sell illegally. Horns can trade for as much as $65,000 a kilogram, according to T’Sas Rolfes. At the current price of $1,642 per ounce, a kilogram of gold is worth $51,072.

‘Staggering’ Wealth

“There’s massive demand,” said Tom Milliken, the rhino and elephant program leader for Cambridge, U.K.-based TRAFFIC International, a World Wildlife Fund-backed organization that monitors the wild animal and products trade, in an interview from Harare, Zimbabwe. “The amount of disposable wealth, the number of newly rich people in these countries is really staggering.”

The bulk of poached rhinos, more than 70 percent, still are killed in government parks. So far this year, 111 have been poached in the Israel-sized Kruger National Park, compared with 252 last year. The government has deployed the army, improved rangers’ equipment, arrested scores of suspects and shot poachers dead.

Right to Kill

Next is a plan to tighten hunting legislation, monitor wildlife shipments more closely and increase ranger numbers, Environmental Affairs Minister Edna Molewa said in an April 4 interview.

South Africa this year barred Vietnamese nationals, who apply for nearly 60 percent of rhino-hunting permits, from hunting the animals on the grounds that it can’t be assured the horns won’t be resold. Legal hunting gives a value to rhinos, encouraging their breeding by private owners.

Hunters are willing to pay as much as 500,000 rand for the right to kill a large rhino bull on a private farm, said Herman Barnard, the manager of Wildlife Ranching South Africa, in a phone interview.

“A majority of the people that are being arrested here, a lot of the permits that are being applied for here, come from Vietnam,” Molewa said in interview in Kruger Park.

The University of Pretoria is also operating a database that has 3,000 samples of rhino DNA, which can help connect recovered horns to poaching incidents.

300 Rhinos

For Lok, poaching was “something that happened to others” until the death of Kruger, which he named after its mother’s birthplace and the national park, where he had honeymooned with his wife. Treating two other rhinos that were shot and wounded by poachers earlier this year has cost the white-haired entrepreneur thousands of dollars in helicopter and veterinary fees, he explained over Nescafe (NESN) and biscuits as a German shepherd lay beside his sandal-clad feet under a thatch shelter.

Oppenheimer, whose wealth is ranked by Forbes magazine, wasn’t available for an interview. He owns more than 300 rhinos, according to Duncan MacFadyen, the conservation manager for his properties.

John Hume, a hotel magnate in South Africa who says he’s also the world’s biggest private rhino owner, will this year triple his security costs. He’s hiring 40 new guards, alarming his 28,400-acre properties and installing cameras designed to tell the difference between animals and humans. The 70-year-old dehorns all of his 762 rhinos.

Legalize Trade

Still, six of his animals were killed by poachers last year, he said in a phone interview. Hume is promoting a campaign to legalize trade in rhino horn.

“If we made money out of the rhino’s horn, not only would it contribute to stopping the poaching, it would get people to rear and buy rhinos,” Hume said. “It would be the best news the rhino could be possibly get.”

Petitioned by rhino owners, the environmental-affairs department is due to complete a study into the viability of legalizing the trade within South Africa by August.

For now private owners face the stark choice of protecting their rhinos or losing them to poachers.

“Game farming has turned into a war,” said Lok, lamenting the loss of a “paradise” he created to enjoy with his wife and three sons. “How can you protect them in the face of such demand?”

To contact the reporter on this story: Franz Wild in Johannesburg at fwild@bloomberg.net

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net


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