The North Mount Lyell Railway was built to service the North Mount Lyell mine in West Coast Tasmania at the start of the Twentieth century to take ore from Gormanston east of the West Coast Range to the Crotty smelters, and then on to Pillinger in the Kelly Basin of Macquarie Harbour, from where it was shipped out.
The North Mount Lyell Railway had exceptionally easy grades compared to its competitor the Mount Lyell Mining and Railway Company which ran its Abt rack system railway through very steep grades from Queenstown to Regatta Point.
The railway route ran across a belt of karst terrain in the area near the current Darwin Dam - and the engineers of the 1890s were possibly the first in Australia to have designed for the possibility of sinkholes when planning the route.
The line was opened for passengers 15 December 1900, and was taken over by the Mount Lyell Mining and Railway Company on 16 July 1903. The line was serviced by a small rail motor similar to that on the Lake Margaret Tram in the last years of operation. Due to failure of the Crotty smelters and the North Mount Lyell operations in general, and the amalgamation of the Mount Lyell and North Mount Lyell mines and companies, the railway had a short operational life. It closed to passengers in July 1924 and closed in 1929.
The railway was serviced by three Avonside Engines J.Crotty (No.1)(AE 1392/1899), JP Lonergan (No.2)(AE 1393/1899), and DJ Mackay (No.3)(AE 1394/1899). It also had three Shay engines - Number 4 (Lima 698/1902) - 3 cylinder two truck, Number 5 (Lima 697/1902), Number 6 (Lima 704/1902)