Abstract: The collapse of Chile’s saltpetre industry in the early 20th century marked a critical turning point in the country’s economy. At its peak, saltpetre accounted for a majority of tax revenues and exports, but the introduction of a synthetic alternative by Germany in 1928 led to a rapid price decline. This study examines the short- and long-term impacts of this negative shock on regional economic transformation, with a particular focus on industrialisation. Leveraging a newly digitized database spanning 1909 to 1951, this paper analyses structural transformation at the provincial level using the Synthetic Control Method. Preliminary results suggest heterogeneous economic sector developments across regions.