Iron ore mining began at Cockatoo Island in 1951. BHP (now BHP Billiton) operated the mine in the early 1950s and ran it as a complete town site until 1984 when the ore body had been mined to sea level. HWE Mining and Portman Mining Ltd re-opened operations in the 1990s by first retreating old BHP dumps, then forming a seawall and commencing mining below sea level.
The townsite formed by BHP contained a school, movie theatre, and even a lockup prison. During the 1980s businessman Alan Bond opened a tourist resort using the old mining village's infrastructure. This was sold and closed.
Koolan Island is a neighbouring island that was also mined by BHP for high grade iron ore.