Slate quarrying began in the hills above Tywyn in the 1830s, but although many small quarries and test levels were established, only one major quarry was developed in the region, the Bryn Eglwys quarry, north east of the town. Underground working began in the early 1840s, and by 1847 the quarry was being worked by local landowner John Pughe. The finished slates were sent by packhorse to the wharf at Pennal, transferred to boats for a river trip to Aberdyfi (also spelled as "Aberdovey"), and then finally loaded into seagoing vessels, a complex and expensive transportation arrangement which limited the quarry's output. In 1861 the outbreak of the American Civil War cut off supplies of cotton to the mills of the north west of England and as a result a number of prosperous mill owners looked for new business opportunities to diversify their interests. One such owner was William McConnel of Lancashire who, in 1859, had purchased Hengwrt Hall near Dolgellau, north of Tywyn. In January 1864, McConnel formed the Aberdovey Slate Company, which leased the land including Bryn Eglwys from the landowner, Lewis Morris of Machynlleth.