In 1883, an Irish immigrant, Marcus Daly backed by J.B. Haggin and others purchased the land on which the city of Anaconda and the Old Works were to be built. In September 1884 the Upper Works began production, with a capacity to treat 500 tons of ore daily. (Remnants of the Upper Works can be seen today when playing the front nine at Old Works.)
The need for more smelting capacity from the Butte mine's resulted in construction beginning on the Lower Works in 1887, one mile east of the Upper Works. Shortly after completion, the Lower Works were destroyed by fire. The rebuilt Lower Works were operational by 1889 with a capacity to process 3,000 tons of ore daily. To keep up with the ore supply, a third smelter was planned across the valley. Marcus Daly never saw these Reduction Works in operation; he died in New York in 1900.