Agile Dynamics advises Nigeria's SMDF on tokenization of mining assets

17 January 2024 3 min. read

The government of Nigeria has brought Agile Dynamics on board to advise on the tokenization of real world assets in the mining and minerals space, with the aim to accelerate the monetization of its vast endowment of natural resources.

Despite being rich in natural minerals, much of Nigeria’s potential is still left untapped. According to estimates, Nigeria misses out on approximately $40 billion in annual revenue from unexploited gold – just one of the many resources the country houses.

Some estimates believe the aggregated untapped value of Nigeria’s solid minerals sector runs in the hundreds of trillions of dollars.

Agile Dynamics advises Nigeria's SMDF on tokenization of mining assets

With the aim 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 driving and catalyzing private sector-led investments into the landscape.

The SMDF supports the sector with financing across the entire lifecycle of mining projects including exploration, development, and production. The fund also seeks to improve the economic fundamentals of the industry, and stimulate a roadmap towards minimizing the negative externalities of mining, including environmental degradation, health risks, and crime.

In its inaugural strategy, the SMDF has earmarked seven strategic minerals for priority development, namely: Coal, Bitumen, Limestone, Iron Ore, Barites, Gold, and Lead/Zinc.

Tokenization of solid minerals assets

Alongside a plethora of physical-focused initiatives, the SMDF is also exploring digital avenues for supporting its agenda, with tokenization among the pillars.

Using tokenization, the value of resources like gold, minerals and metals is tokenized and tied to a token. Investors can buy (fractions of) tokens issued, with the value of tokens based on the market value of the resource. These tokens are built on a blockchain platform, which ensures the security of ownership. Meanwhile, tokens can be bought and sold on electronic platforms where digital assets can be traded.

The idea behind tokenization is that it makes investing into solid mineral assets a lot easier and more attractive, beefing up the scope for foreign direct investments.

Advising the SMDF through this tokenization process is Agile Dynamics, a leading management consultancy in the blockchain world. The project is led by its Agile Dynamics Tech label.

“By partnering with SMDF, we are helping Nigeria to unlock its mining potential and create a more stable revenue foundation. By facilitating the tokenization of the country’s solid mineral assets, we will help secure investments and contribute to catalysing sustainable growth and prosperity.”

“This agreement represents a significant step forward in our mission to foster meaningful change through technology and strategic partnerships,” Lalovich continued.

A 2023 report from Agile Dynamics suggested that blockchain technology can increase the global gross domestic product (GDP) by some $2.1 trillion by 2030.