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The lifeless pampa around Iquique is peppered with the geoglyphs of ancient indigenous groups, and the shelf where the city now lies was frequented by the coastal Chango peoples. However, the Iquique area was first put on the map during the colonial era, when the bonanza Huantajaya silver mine was discovered.

During the 19th century narrow-gauge railways shipped minerals and nitrates through Iquique. Mining barons built opulent mansions, piped in water from the distant cordillera and imported topsoil for lavish gardens. Downtown Iquique reflects this 19th-century nitrate boom; the corroding shells of nearby ghost towns such as Humberstone and Santa Laura whisper of the source of this wealth.

Even when Iquique was reveling in its newfound riches, though, all was not well. The city witnessed one of the bloodiest events in Chilean labor history. In 1907, nearly 8500 strikers gathered around the Escuela Santa María to protest unfair treatment in the salitreras (nitrate mines). In exasperation, police and military fired upon the unarmed strikers, killing hundreds and wounding many more. Chilean folk group Quilapayún immortalized the tragic incident with their recording Cantata Popular Santa María de Iquique.

After the nitrate bust, Iquique reinvented itself primarily as a fishing port, shipping more fish meal than any other port in the world. However, it was the establishment of the zona franca in 1975 that made this one of Chile's most prosperous cities.