Live white rhino horn trade scenario – why prices would rise 900%

Kevin Leo-Smith
Kevin Leo-Smith

It’s an uneasy discussion – how can authorities stop the expected extinction of an animal such as the white rhino? But experts agree that the biggest threat to wildlife land in Africa is poverty. In this interesting analysis, conservation developer Kevin Leo-Smith looks at the different values put on a live or dead rhino. The current value gap between the two is one of the main reasons criminals will go to such lengths to illegally trade rhino horn. Kevin looks at a model whereby you legalise trade in rhino horn, which ultimately lifts the value of a live rhino. And by changing the resource economic, you change the associated value judgment made by the potential poacher. It’s an interest take on a subject that is bound to generate lots of positive and negative commentary. – Stuart Lowman

By Kevin Leo-Smith*

A simple Net Present Value (NPV) model was developed for estimating adult white rhino market values under a legal trade in rhino horns scenario – assuming the CSO model of trade as promoted by Michael Eustace and others. This is not a scientific paper but my own work done alone based on my own experience and assumptions. The details are clearly subject to opinion and different methodologies can be used.

There are essentially 3 main ideological camps in the conservation of rhino debate:

  1. The illegal trade groups (this is the one too many overtly ignore)
  2. The anti-trade groups
  3. The pro-trade groups.

I fall into the latter group. The changes to the Game Theft Act in South Africa in the 1980’s effectively created a market for live game including rhino. The successes of the then Natal Parks Board, since Operation Rhino in the 1960’s led to a surplus of rhino in the formal protected areas. The first live rhino sales took place at the unbelievable price of R100 each by tender, until the auction system was adopted.

Prices of live rhino rose rapidly until they peaked in real terms around 2008/9 before the current poaching crisis started to bite hard. Current prices are reasonably firm considering the considerable risks to rhino ownership. Anecdotal evidence indicates that many former rhino owners have sold all their rhino due to the costs/risk of protecting rhino. Despite the difficulties average auction prices have maintained from the onset of aggressive poaching in South Africa from 2008. In general it seems that adult bulls average around [1]R250,000 each while adult cows average R300,000.


Should the legal horn trade scenario result, with a single legal seller (the CSO entity) channeling legal horn using all the obvious modern technical and secure administrative controls (genetic linking of horn to source rhino, ownership and harvesting permits, with legalised consumer selling in registered outlets in consumer countries) then it is likely that the value of live rhino will rise considerably.

Today the value of a dead adult rhino is of the order of R 3.3 million (4kg horn X USD 60,000/kg) at a consumer level. It is therefore not surprising that, there is a massive incentive for organized crime syndicates to control the illegal rhino horn trade, which they now do. Furthermore the dead value of a rhino exceeds the live value by a factor of 10. Such a large discrepancy between dead and live value is too large an arbitrage difference to not attract criminals at all levels.

Read also: Rhino horn – to trade or not to trade?

The driver for the live value of rhino today includes the market balance between the hunted price for a trophy bull, the photographic value to safari tourism and the value of new progeny born adjusted for the risk of loss by the rhino owners and the overall cost of ownership. Not all this cost is financial, as many owners considerer the psychological cost of seeing one of their rhino slaughtered as too onerous.

Therefore, developing a model to estimate the potential live value for adult male and female rhino under a legal trade scenario cannot realistically model the soft factors implicit in normal price formation mechanism.

The base assumptions used in my model are:

Assumptions Male Female
Discount rate 20% 20%
Kg of horn per 4 year harvest cycle 3.75 2.50
Effective retail horn per kg $30,000 $30,000
ZAR/USD exchange rate 13.75 13.75
Age of first harvesting of a calf – years 7 7
Calf male/female birth ratio 50/50 50/50
Age of first calving 4
Model period assume cow barren in (years) 44
Terminal value of rhino born to cow (model period) allowing for age variations R1,100,000 R1,500,000
Model does not compound female calves births (therefore conservative)
Inflation on expense and revenue 0% 0%
Cost per rhino per annum R30,000 R30,000

Using the above conservative assumptions a rhino bull kept only for horn sales and breeding (on average an owner will have either a hunting or safari business of some kind too) will be worth around R 1,3 million live. While and adult cow will be worth around R 2.7 million live for breeding. The assumptions are fairly conservative given that additional income could be generated throughout their lives. Therefore these prices represent breeding values. Other owners may place higher values on specific individuals for other reasons.

The mean live rhino prices would rise by 520 % for bulls and up to 900 % higher for females than today. The cost of keeping rhino is also likely to drop under a trade scenario as the poaching threat would reduce significantly too. There would be other consequential adjustments to perceived value of conservation land, and claimant communities would be incentivised to hold rhino and other wildlife on their land, as the returns would greatly exceed that from domestic livestock farming. A significant change in the overall financial returns for a species like rhino, which are almost always held under a multi-species wildlife management regime would quickly impact the value of such wildlife land.

Traditionally average returns to wildlife land are of the order of 4 % – 6 % on capital employed, per annum. The additional asset value created to wildlife land by a legalised trade in rhino horn and its consequent effect on rural GDP is massive. Experts agree that the single biggest threat to wildlife land in Africa comes from the poverty living across the boundaries. This poverty is the breeding ground for people willing to risk their lives to poach animals including rhino. Change the resource economics and the associated value judgment made by the potential poacher changes forever too.

The underlying model can be made available if required.


  1. George Hughes retired CEO of the KwaZulu Natal Parks Board, Howick South Africa [email protected]
  2. John Hanks founder of Institute of Natural Resources, Peace Parks Foundation and Consultant Greyton South Africa [email protected]
  3. Mrs Tlhabologo Ndzinge former Director of Tourism Botswana [email protected]
  4. Tim Liversedge Wildlife Documentary film maker in Botswana [email protected]
  5. Mrs Myra Sekgororoane former CEO of Botswana Tourism Marketing Board [email protected]
  6. Muriel Dube former senior executive Investec Bank Plc. In London [email protected]
  7. Anice Hassim CEO immedia Ecosystems in Durban [email protected]
  • Kevin Leo-Smith, Conservation projects developer