Exploiting the mines by renting slaves: How entrepreneurs yielded the most silver when leasing in Laurion – an invisible aspect of Coinage and Financial Investment in 5th Century B.C. Athens
Athens’ power was based on the treasures of Laurium. There, silver was mined by slaves. This was a lucrative business. A slave owner calculated a return of 30 %! More you will hear in this podcast.
Come along with us on our journey through the world of money. Today we are stopping in Laurion, the silver mines of Athens. We are in the period around 460 B.C.
Carrying owls to Athens: This saying (which means the same as carrying coals to Newcastle) doesn't mean real owls, but the Athenian's coins, their tetradrachms.
On the front, these coins show the head of Athena. She is wearing an attic helmet adorned with laurel leaves. On the back, her animal the owl is depicted, or to be zoologically correct, Athena noctua. Upper left we see an olive branch with a fruit and a crescent moon. The ethnicon is on the right, this is the name of the person who had the coin minted.
The silver for these Athenian coins came from Laurion. This region stretched from the famous Cape Sounion temple and the port of Thorikos. In the 5th century B.C., there was a mining area here, in which thousands of slaves worked.
You can still see the traces of the ancient mine today, if you travel through the countryside with open eyes. Archaeologists have verified over 2,000 ancient shafts and tunnels. Some of them lie close to each other.
Stone columns separated the mines. They didn't just prevent the tunnels from caving in, they were official boundary stones. You see, the people of Athens leased their mines to private businessmen.
Demosthenes let us know how much it cost. He reported that a man by the name of Pantainetos paid 9,000 drachms to the Athenians for three years to be allowed to use his mine.
A 25 to 55-metre deep shaft led from the surface into the earth's interior. The individual tunnels branched off from this shaft.
It was hard work, advancing the tunnels and extracting the silver. Two slaves worked for ten hours for 10 to 12 centimetres of progress. One dug with hammer, chisel, pickaxe and crowbar. The other took the loose rocks to the end of the tunnel. The work continued day and night in a shift system. Ultimately, the mine leaseholder wanted to generate as high a yield as possible during the term of his lease.
80 to 90 % of a mining company's current assets were the slaves. In order to avoid such a high capital expenditure on a short lease, the mine leaseholders relied on rented slaves. Because instead of investing in equity funds, Greek rentiers invested in human flesh.
A slave without any special skills cost 150 to 200 drachms. His owner earned roughly one obol a day for him. Interest was also charged for days off and also when the slave was ill. If he died or escaped, then the owner of the mine had to provide a replacement. So it was secure work. The rentier could expect a yield of 30 %. The acquisition was amortised within three years. Cash loans, on the other hand, only brought in 12% in classical times. Owning slaves was worth it.
Slaves were also needed for the preparation of the metal. Women, children and old men sorted the ore-rich rocks. Afterwards, the rocks were crushed in mills and mortars.
Finally, the raw material was washed. The water flowed through standard-sized channels. Light rock would float on further. The heavy silver sank to the floor.
In dry Laurion, huge cisterns were used to store enough water for the process. These storage containers could stockpile more than 20 times the amount required for the general running. Despite this, they were careful with the raw materials and used the water several times.
The smelting was also carried out in the mining area. It seems that there were a few central furnaces to which all the ore from the tunnels was brought.
The silver from Laurion gave Athens major economic benefits. It gave the Athenians the means to build their great fleet. In the Battle of Salamis the Athenians' ships secured Greece's freedom.
Later, this silver even gave Athens a level of superiority which placed it at the head of the Delian League. When the Athenians annexed the combined federal treasury, the riches of Laurion lost their significance.
It was the allies who financed the magnificent buildings of the Acropolis, with their silver.