In the high, thin air of Chile’s Tarapacá region, a northern extension of the Atacama Desert, lies the ghost town of Humberstone. This once thriving place is now a ruined assemblage of twisted tin sheeting, abandoned houses and disappearing roads, overshadowed by mountainous slag heaps and the skeletons of industrial machinery: a Macchu Picchu for the industrial era. And yet Humberstone, alongside many other deserted neighbours, was once at the heart of an industry that transformed towns and cities, dominated economies, changed politics and led to war, reshaping countries in a way that is still felt today. This bleak but beautiful place has left an extraordinary physical legacy that extends well beyond the sight of the Andes, and offers a stark lesson in global influence and the in-built vulnerability of supply chains.

At the centre of this story is a simple, naturally-occurring chemical compound – sodium nitrate (NaNO₃) – or saltpetre. And Tarapacá’s mineral-rich desert pampa sandwiched between the Andes and the lower Cordillera de la Costa coastal mountains, has the largest deposits of saltpetre in the world. But the raw ingredients of this story are more than the generosity of geology: personalities and nations are firmly fixed in the equation. Scientists, such as Darwin and Humboldt, helped spread the message of saltpetre’s potential to the world. A generation of European entrepreneurs made Chile their home: James Thomas North from Leeds came to South America aged 27 as a boiler riveter and went on to become the ‘nitrate king’, accruing vast personal wealth and political influence; James ‘Santiago’ Humberstone, a chemical engineer, had the Tarapacá town renamed after him, while the local pampinos who worked there created a distinctive cultural identity.

Tarapacá is a deeply inhospitable region, with rainfall that is effectively zero, and an average temperature of 30°C during the day, dropping to 2°C at night. Consequently, Tarapacá’s settlement was largely limited to the coast and occasional desert oasis fed by meltwaters. But a chain of events in the late eighteenth and early nineteenth centuries was to draw global attention to this sparsely occupied area. The fuse was lit by Joseph Dombey, a French scientist, who brought back samples of sodium nitrate to Europe after a scientific expedition in 1778. Shortly afterwards, the Napoleonic wars increased demand for gunpowder – of which saltpetre is the key ingredient. The new-found resources heightened Spain’s interest; its South American colonies included saltpetre-rich provinces. By 1812 several companies had been established inland from the coastal port of Iquique to mine saltpetre for the manufacture of gunpowder.

Despite the potential and demand, the industry was slow to take off. The compound commonly used to create gunpowder is ordinary saltpetre, or potassium nitrate. It burns fiercer, at a lower temperature and is less absorbent than Chilean sodium nitrate. And, while it was possible to convert Chilean saltpetre to ordinary saltpetre, the early industry was constrained by its inefficiency, requiring concentrated ores of over 60 per cent nitrate content, large quantities of fuel and a transport system reliant on mule-trains to cross the mountains to the coast.

Charles Darwin, arriving in 1835 on HMS Beagle, commented on the port city of Iquique and a visit to the fledgling saltpetre industry further inland:

July 12^th We anchored in the port of Iquique. The town contains about a thousand inhabitants, and stands on a little plain of sand as the floor of a great wall of rock, 2000 feet in height which here forms the coast … The aspect of the place was most gloomy: the little port, with its few vessels, and small group of wretched houses, seemed overwhelmed and out of all proportion with the rest of the scene.

The inhabitants live like persons on board a ship; every necessary coming from a distance. Water is brought in boards from Pisagua, about forty miles to the northwards … In like manner firewood, and of course every article of food, is imported. Very few animals can be maintained in such a place: on the ensuing morning I hired, with difficulty at the price of four pounds sterling, two mules and a guide to take me to the saltpetre works. These are the present support of Iquique. During one year the value of one hundred thousand pounds sterling was exported to France and England. This saltpetre does not properly deserve to be so called; for it consists of nitrate of soda, and not of potash, and is therefore of much less value. It is said to be principally used in the manufacture of nitric acid. Owing to its deliquescent property it will not serve for gunpowder.

Despite his reservations, Darwin’s description was of an industry on the cusp of massive expansion. In 1840, five years after his visit, the Tarapacá area was producing 73,000 tons of saltpetre, which increased to 500,000 by 1870.

The real trigger for the exponential growth of the desert towns were scientific advances made in Europe during the first half of the century, which demonstrated the value of sodium nitrate as a fertiliser. The growing urban populations of industrial nations across the world required greater agricultural productivity, and discoveries by the German scientist Alexander von Humbolt, botanist Justus von Liebig, and the French chemist Jean-Baptiste Boussinghault – all of whom made trips to what was to become Peru – led to a saltpetre boom.

Ironically, the Napoleonic Wars, with their increased demand for gunpowder, also lit the touchpaper for Chilean independence from Spain, officially declared in 1818. Further north, Peru followed in 1821, with Bolivia declaring independence in 1825. The creation of new nation states gave opportunities to foreign adventurers and entrepreneurs. Land was given freely in return for tax receipts and European investment in the saltpetre industry grew substantially, led by characters such as Englishmen James North, who went on to become a multi-millionaire, and engineer and mine manager James Humberstone.

Over the following decades new technologies significantly improved the efficiency of mining. From 1863, the introduction of the Shanks technique transformed the cottage-industry witnessed by Darwin into a fully-fledged industrial process. Iodine became an important by-product of the sodium nitrate leaching process, with Chile producing over 70 per cent of the world’s supply by the end of the century.

That the three young countries ended up going to war was a reflection of the growing importance of saltpetre to the national economies of Chile, Bolivia and Peru. After independence from Spain, Chile and Bolivia reached agreement about their disputed border; an 1866 treaty made provision for both countries to share the tax revenue of mineral exports on either side of the new border – the Zona de Beneficious Mutuos. A further treaty in 1874 handed Bolivia all the tax revenue from the area, but gave Chilean companies fixed rates for a period of 25 years. This worked in Chile’s favour, particularly with significant outside investment from Britain, alongside benefits for a growing Chilean population who served as railway builders and labourers to the industry. In 1878, the Bolivian government imposed a backdated increase on the Chilean companies, who refused to pay and were subsequently threatened with confiscation. Bolivia’s seizure of the Antofagasta Nitrate & Railway Company in 1879 led to the arrival of 2,000 Chilean troops in the Bolivian city of Antofagasta and the start of La Guerra del Pacifico, also known as the Saltpetre Wars. Peru was drawn into the conflict when Bolivia called on a secret treaty agreed just six years earlier.

The war lasted until 1883, beginning at sea and culminating in a series of land battles with the Chilean army moving ever further north, through Bolivia’s coastal territories and on to Peru’s capital, Lima, which fell in January 1881. Peruvian resistance continued until the Treaty of Ancón. Signed on 20October 1883, the treaty handed Tarapacá and Antofagasta to Chile, and marked a dramatic rewriting of national boundaries that still has repercussions today. Bolivia’s loss of its coast, leaving it a land-locked nation, still plays heavily in the country’s psyche, and diplomatic relations have been cut off with Chile since 1978.

After the war, the saltpetre industry in Chile reached its zenith. Foreign investment flooded into Tarapacá and Antofagasta, creating a railroad infrastructure that significantly reduced transport expenses. The first railway in the region was constructed in 1871 connecting the La Noria Works with Iquique, from where boats transported saltpetre to a hungry world; the network expanded to almost 1,800 km by 1905. British involvement also increased – before the war British investors had interests in 13 per cent of Tarapacá’s saltpetre industry, rising to 34 per cent after the war, and 70 per cent by 1890.

In 1888, the modernising Chilean president, José Manuel Balmaceda, sought to nationalise the industry, blocking sales of state-owned assets to foreigners. This, combined with Balmaceda’s aspirations for a presidential system, led to the Civil War of 1891, in which British commercial interests and the Chilean political class united in rebellion against the president. A rebel Junta formed in Iquique, and its army, backed by the saltpetre businesses, overthrew Balmaceda’s forces to form a new government. Unsurprisingly, they supported an outward-looking economic policy which encouraged further foreign investment and export. In return, taxes were levied which brought enormous financial gain to the Chilean state, so much so that by 1890 50 per cent of the country’s total revenue came from the duty on saltpetre, and would remain so for almost three decades.

Over a century, the towns of the Tarapacá pampa grew from small industrial villages to large company-managed settlements. In a desert landscape previously devoid of all but the occasional passing human, new towns sprang up, with all the accoutrements of modest civilisation. Humberstone was founded initially in 1862 as La Palma by the Peruvian Nitrate Company, while Santa Laura, less than two kilometres away, was constructed ten years later. The two operations were to become one of the largest works in the Tarapacá, and home to nearly 3,500 residents.

Architecturally, the attributes of these new towns are fascinating. Humberstone is built on a grid plan around a central square, echoing a uniformity commonplace among quickly-formed towns across the world. The town’s grid of ten-by-six blocks – big, but still a quarter of the size of the tailings mound – was largely made up of accommodation for workers and their families. Constructed in Douglas fir, with stuccoed walls and corrugated zinc roofs, there was a strict hierarchy of buildings reminiscent of Victorian town planning in places such as Lancashire’s mill towns. ‘Bachelors’ lived in their own 4 x 3.5m rooms in barrack blocks with shared bathrooms, while families had small five-room terraced houses that included a front garden and a back yard. Semi-detached accommodation marked a step up the hierarchy for married employees, while the managers had a block of grander houses in one of the smaller public squares, each entered by an arcaded porch and finished with decorative touches.

A town needs services, particularly when the nearest alternatives would require an arid 45 mile trip to the coast. Physical sustenance could be found in the canteen, central market and general store, while the spiritual equivalent was served by a chapel, cinema and theatre. Those seeking more exercise could enjoy basketball, tennis, swimming, pitch-and-toss or football, and the town’s children had a school, nursery and scout centre. A hotel and social club looked after guests and locals respectively. Public squares, a bandstand and administrative buildings, completed the ensemble.

Given the available resources and desert location, the architecture was simple and functional: the majority of materials, such as the Douglas fir that framed most buildings, had to be imported and brought from the coast. But there were architectural flourishes in adapting to the harsh environment, in particular verandas and covered walkways to afford protection from the sun. And the towns were characterised by distinctive building materials, such as calamine zinc and a ‘Pampa cement’, the latter made from the saltpetre tailings, alongside examples of extreme upcycling – the swimming pool was made from the recycled iron hull of a boat shipwrecked off Iquique.

At a glance the facilities appeared comprehensive, but the reality of life in a company town varied depending upon status and wealth. The owners, for the large part British, visited from their luxurious homes in the coastal cities. Managers benefited from relatively spacious housing and the range of facilities on offer, while the pampinos workers, predominantly men, led hard, dangerous lives. The workers would arrive either from the coast or from the Andes, tempted by the promise of riches, to be equipped, clothed and accommodated by the mining company. Payment was by token, only spendable in the company shop, which made a healthy profit, leaving most workers tied to the place and without the support of a distant family. Corporal punishment by the company administrators, combined with a lack of regulations to protect workers, often led to unrest and brutal repression. It is out of these conditions that the Chilean labour movement grew, firstly through mutual societies and later as unions.

But the most dramatic impact of the desert industry was not felt in places such as Humberstone, but in Chile as a whole. The sheer scale of wealth brought in by saltpetre extended to every area of life. First it was the state that grew: administrators, defence, education and transport infrastructure. The wealth coming into the country was evident in the growth of ports such as Iquique, home to eleven different shipping companies transporting saltpetre across the globe, and returning laden with British coal and textiles. The other ports of Antofagasta, Mejillones, Taital and Pisagua saw a similar expansion, as did its capital Santiago. Chile could not only afford new architecture, but embraced European architectural styles; this was in part aspirational, and partly a reflection of the taste of the expatriates who made Chile their home.

In Santiago saltpetre wealth paid for new law courts, the central post office, the National Library, the Museo Nacional de Bellas Artes, and the remodelling of important churches. The central Alameda railway station belongs to this period, designed by Gustave Eiffel in 1897. Valparaiso, Chile’s principal port city, was home to affluent alcoves of British and French expatriates who lived in neighbourhoods with more in common with European communities than local ones. It is little surprise that Valparaiso Wanderers, founded in 1892, is the oldest football club in Latin America – and that their fierce rivals are Everton de Viña del Mar, located just across the bay – each founded by expatriate Britons.

It is rare to be able to pinpoint the collapse of an industry to a specific moment in time, and for the repercussions to be so all-enveloping. Aside from Chile, the major investors in the South American saltpetre industry were the United Kingdom and Germany, who together accounted for two thirds of nitrate exports during the first decade of the twentieth century. The outbreak of the First World War served both to boost the industry and to demonstrate the vulnerability of a distant supply chain: never was saltpetre in more demand for gunpowder and fertiliser, but Allied naval blockades in the South Atlantic significantly reduced Germany’s access to it, despite studied Chilean neutrality throughout the conflict.

The German response was to invest in science, a strategy that bore fruit when chemists Fritz Haber and Carl Bosch developed a commercially viable means of synthesising nitrate from ammonia in 1913. With no access to the saltpetre fields, German home production increased significantly, overtaking that of Chile by the early 1930s. The impact in Chile was dramatic and, despite the development of more efficient systems of saltpetre production and failed attempts to nationalise the industry, the desert economy collapsed over the course of two decades. By 1950 Chilean nitrate accounted for just 15 per cent of global nitrate production, compared to around 80 per cent during the 1890s. In the 1990s, one hundred years after its peak, the country accounted for just 0.1 per cent of the world’s market share.

The impact in the Atacama was abandonment and a return to the desert. Thousands of workers moved to Santiago and southern Chile to find employment, and the mining towns were abandoned, their structures sold, leaving only the tailings mounds as evidence of a once global industry. Humberstone and Santa Clara closed in 1958 and 1960 respectively. Together, they are now a World Heritage Site.

For Chile, the loss was devastating. The League of Nations declared it to be the country most affected by the Great Depression (1929-32), and it took a decade to wean the economy off the easy tax receipts from saltpetre, which distracted from alternative strategies for growth.

Beware the paradox of plenty: the Midas touch, in which geographical locations are blessed with geological abundance, can harbour disaster after short-term gain. This is especially true of communities with a single raison d’etre, where success and failure are far more fickle than in long-lived places with diverse economic foundations. And it happens throughout history and across the world: the hunt for gold, silver, diamonds or other metals led to the short-lived explosion of mining towns in America, Australia and Namibia, each abandoned once supplies were depleted and newer, more profitable sources took over.

And what of the future? Some of the petrostates of West Asia have seen the writing on the wall and are seeking to diversify their economies, but oil dependence, like that of saltpetre, is a difficult habit to kick. With a tiny public sector, political rigidity and a reluctance to embrace social and economic change, one wonders: will the oil towns of Ahmadi, Awali and Dhahran eventually mirror those of Humberstone and the desert towns of the Atacama?