Founded in 1545 as a mining town, it soon produced fabulous wealth, becoming one of the largest cities in the Americas and the world, with a population exceeding 200,000 people.
In Spanish there is still a saying, vale un Potosí, "to be worth a Potosí" (that is, "to be of a great value"). For Europeans, Peru—Bolivia was part of the Viceroyalty of Peru and was known as Alto Perú before becoming independent as part of Bolivia. Potosi was a mythical land of riches, it is mentioned in Miguel de Cervantes famous novel, Don Quixote (second part, chap. LXXI) as a land of "extraordinary richness". One theory holds that the mint mark of Potosí (the letters "PTSI" superimposed on one another) is the origin of the dollar sign.
It is from Potosí, that most of the silver shipped through the Spanish Main came. According to official records, 45,000 short tons (41,000 metric tons) of pure silver were mined from Cerro Rico from 1556 to 1783. Of this total, 9,000 short tons (8,200 metric tons) went to the Spanish monarchy. Due to such extensive mining, the mountain itself has diminished in height; before the mining started it was a few hundred meters higher than it is today.
Native laborers were used to work on its mines through the traditional Incan mita system of contributed labor. Many of them died due to the harsh conditions of the mine life.
According to Noble David Cook, "A key factor in understanding the impact of the Potosi mita on the Indians is that mita labor was only one form of work at the mines. A 1603 report stated that of 58,800 Indians working at Potosi, 5100 were mitayos, or less than one in ten. In addition to the mitayos there were 10,500 mingas (contractual workers) and 43,200 free wage earners. Yet mitayos were required to do the work others refused: predominantly the transport of the ore up the shafts to the mouth of the mine."
To compensate for the diminishing indigenous labor force, the colonists made a request in 1608 to the Crown in Madrid to begin allowing the importation of 1,500 to 2,000 African slaves per year. An estimated total of 30,000 African slaves were taken to Potosí during the colonial era. African slaves were also forced to work in the Casa de la Moneda (mint) as acémilas humanas (human mules). Since mules would die after a couple of months pushing the mills, the colonists replaced the four mules with twenty African slaves.
In 1672, a mint was established to coin silver and water reservoirs were built to fulfill the growing population's needs. At that time more than eighty-six churches were built and the city's population increased to nearly 200,000, making it one of the largest and wealthiest cities in the world.
After 1800, the silver mines were depleted, making tin the main product. This eventually led to a slow economic decline. Nevertheless, the mountain continues to be mined for silver to this day. Due to poor worker conditions (lack of protective equipment from the constant inhalation of dust), the miners still have a short life expectancy with most of them contracting silicosis and dying around 40 years of age