(Bloomberg) -- In the latest sign of easing political risk in Chilean mining, Rio Tinto Group agreed to buy a majority stake in an exploration project in the South American nation.

The London-based firm will pay $45.6 million plus royalties for 58% of the Agua de la Falda project from Pan American Silver Corp. Chile’s state-owned copper company Codelco owns the other 42%.

While that’s a minor investment for Rio Tinto, the world’s second-biggest mining company, it’s a strong endorsement for Chile. The country is emerging from the threat of radical regulatory change as part of a new constitution and tax hikes that would have undermined its competitiveness.

Tensions have eased since an initial constitutional process gave way to a more conservative format and the government agreed to reduce the tax burden on companies from a new mining royalty.

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