DealMakers - 2023 Annual
Special Recognition Award
Conserving the gentle giant
The Independent Panel singled out this transaction for its importance for our wildlife. While not qualifying for Deal of the Year, they believed that its impact, in terms of protecting the white rhino species, is commendable and worthy of special recognition.
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In early 2023, African Parks announced that it would acquire the captive rhino breeding operation known as the Platinum Rhino Conservation Enterprise (previously Buffalo Dream Ranch) from John Hume, a South African conservationist, and would relocate and rewild over 2,000 captive-bred Southern white rhinos.
As a species, and especially in South Africa, the white rhino is under extreme pressure because of poaching. Historically, the rhino consisted of two subspecies: the southern white and northern white. The northern white is functionally extinct, with just two non-breeding females in captivity in Kenya. According to African Parks, Southern white rhinos reached an all-time low of 30 to 40 animals in the 1930s, but through conservation endeavours such as Platinum Rhino, the numbers are currently up to c.16,800, according to the IUCN African Rhino Specialist Group. South Africa is home to nearly 80% of the world’s rhinos, making it a hotspot for poaching – driven by demand from Asia, where horns are used in traditional medicine for their supposed therapeutic effect.
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A former businessman who made his fortune developing tourist resorts, John embarked on a speculative wildlife industry venture. Over the past 30 years, he has invested around $150m into this massive philanthropic project to save the rhino and claw it back from the brink of extinction. Earlier this year, due to financial distress, the 8,000-hectare Platinum Rhino operation was put up for auction, with bids starting at US$10m. But, as was the case in 2018 when Hume invited investors to take up to a 50% stake in the operation, there was no interest. African Parks was then approached by numerous concerned individuals from the conservation sector, to provide a solution to prevent a potential conservation crisis.
Founded in 2000, African Parks is a non-profit conservation organisation that takes on the responsibility for the rehabilitation and long-term management of protected areas, in partnership with governments and local communities. The NGO manages 22 national parks and protected areas in 12 countries, covering over 20 million hectares in Angola, Benin, Central African Republic, Chad, the Democratic Republic of Congo, the Republic of Congo, Malawi, Mozambique, Rwanda, South Sudan, Zambia and Zimbabwe. Prior to the transaction, African Parks was not involved in the management and or protection of any protected areas in South Africa.
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The NGO counts the EU, National Geographic, the Howard G Buffett Foundation and the Walton Family Foundation among its many backers.
At the time of the announcement, Peter Fearnhead, CEO and Co-Founder of African Parks said that while the NGO had no intention of being the owner of a captive rhino breeding operation, they recognised the moral imperative of finding a solution for the animals. While the scale of the undertaking is enormous and daunting, he said that it was equally one of the most exciting and globally strategic conservation oppor-tunities, involving 12% of the world’s remaining rhino population.
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The transaction had two key parts. The sale of the business, Platinum Rhino, located in the North-West Province. The wildlife assets were not limited to rhino, but included other wildlife and domestic livestock. The transaction was structured to ensure that only vital assets were acquired. The transaction also involved the sale of Ntsele Trading 44, a company providing security services exclusively to Platinum Rhino. This ensured uninterrupted continuity of the security services vital to prevent poaching. After conducting a through due diligence, and with the support of the SA government, African Parks secured emerging funding to make the transaction possible.
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The aim is to translocate the rhinos to well-managed, protected areas across the continent over the next 10 years, relocating up to 300 per year. Funding has been secured for the first year of relocations, after which further funding will need to be sought. According to African Parks, it will cost c.$1,500 to move each animal by road in South Africa, and between $5,000 and $10,000 in Southern Africa. Airlifting them to parks in countries such as Rwanda and the DRC, where rhinos have previously been relocated, will cost c.$50,000 each.
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The project has made an outstanding contribution to the long-term security of the species, made more so by the fact that the financial support has come from John’s personal savings. While opinions in the conservation space vary on the business rationale of the establishment of Platinum Rhino, notwith-standing these reservations, it is recognised that the innovative rhino breeding practices demon-strated by the project have resulted in a significant addition to the global white rhino population. Thriving African rhinos play key ecological roles within ecosystems, within which their evolution depends on their genetic health, not just on population numbers. They are valued by people as an iconic species, and it can be argued that they contribute to human well-being.
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Local Advisers: CMS.
