In the pre-Incan era, Huancavelica was known as the Wancawilka region or "the place where the grandsons of the Wankas live". The city itself was established on August 5th, 1572. The mines of Huancavelica were dicovered in 1563/1564 by the Indian Nahuincopa, servant of Jerónimo Luis de Cabrera.

The area was the most prolific source of mercury in Spanish America, and as such was vital to the mining operations of the Spanish colonial era. Mercury was necessary to extract silver from the ores produced in the silver mines of Peru, as well as those of Potosí in Perú superior ("Upper Peru," now Bolivia), using amalgamation processes such as the patio process or pan amalgamation. Mercury was so essential that mercury consumption was the basis upon which the tax on precious metals, known as the quinto real ("royal fifth"), was levied.

The extraction of the quicksilver in the socavones (tunnels) was extremely difficult. Every day before the miners came down, a mass for the dead was celebrated. Due to the need of numerous hand-workers and the high rate of mortality, the Viceroy of Perù Francisco de Toledo resumed and improved the pre-Columbian mandatory service of the mita. Despite the risks, the mining attracted people from all over the Viceroyalty. The alloted concession were rectangular, about 67x33m. Miners were divided in carreteros and barreteros.

In 1648 the Viceroy of Peru, declared that Potosí and Huancavelica were "the two pillars that support this kingdom and that of Spain." Moreover, the viceroy thought that Spain could, if necessary, dispense with the silver from Potosí, but it could not dispense with the mercury from Huancavelica.[1]