Unlocking Nigeria’s Mineral Wealth: Agile Dynamics Partners with SMDF to Drive Tokenization of Mining Assets

The Nigerian government has engaged the services of Agile Dynamics to provide guidance on the proposed tokenization of tangible assets within the mining and minerals sector, as part of a broader effort to accelerate the exploitation of the country’s abundant natural resources.

Despite Nigeria’s significant mineral reserves, a large portion of this potential remains untapped. This underutilization results in an annual revenue loss of approximately $40 billion from unexplored gold deposits alone. Industry estimates suggest that the collective value of Nigeria’s unexploited solid minerals could amount to hundreds of trillions of dollars.

In an effort to enhance the value of the solid minerals sector, the Government of Nigeria recently established the Solid Minerals Development Fund (SMDF), a sovereign fund tasked with incentivizing and supporting private sector investments in the industry. The SMDF provides financial backing across all stages of mining projects, including exploration, development, and production, while also working to improve the industry’s economic fundamentals and mitigate adverse impacts such as environmental degradation, health hazards, and criminal activity.

As part of its initial strategy, the SMDF has identified seven strategic minerals for prioritized development, namely Coal, Bitumen, Limestone, Iron Ore, Barites, Gold, and Lead/Zinc.

Tokenization of Solid Minerals Assets

In addition to its physical-focused initiatives, the SMDF is exploring digital avenues to strengthen its agenda, with tokenization emerging as a key focus. Tokenization involves converting the value of resources such as gold, minerals, and metals into tokens, which are then associated with a token. Investors have the opportunity to purchase fractions or whole tokens, with their value being contingent on the market worth of the underlying resource. These tokens are rooted in a blockchain platform, ensuring the secure ownership of assets, while also being tradable on electronic platforms designed for digital assets.

The fundamental rationale behind tokenization lies in its capacity to streamline and enhance investment in solid mineral assets, thereby expanding the scope for foreign direct investments in the sector.

Agile Dynamics, a leading management consultancy in the realm of blockchain technology, is leading the advisory efforts for the SMDF in the tokenization process through its Agile Dynamics Tech arm.

“Through our collaboration with the SMDF, we aim to unlock Nigeria’s mining potential and establish a more stable revenue base. By facilitating the tokenization of the country’s solid mineral assets, we strive to attract investments and contribute to fostering sustainable growth and prosperity,” affirmed a spokesperson from Agile Dynamics.

Additionally, the agreement is considered a significant stride in the company’s mission to drive consequential change through technology and strategic partnerships, as expressed by Lalovich, a representative of Agile Dynamics.

According to a 2023 report from Agile Dynamics, the integration of blockchain technology has the potential to increase the global gross domestic product (GDP) by a substantial $2.1 trillion by 2030.