There are no written accounts establishing exactly when mining operations at Falun Mine began. Archaeological and geological studies indicate, with considerable uncertainty, that mining operations started sometime around the year 1000. No significant activities had begun before 850, but the mine was definitely operating by 1080. Objects from the 10th century have been found containing copper from the mine. In the beginning, operations were of a small scale, with local farmers gathering ore, smelting it, and using the metal for household needs.
Around the time of Magnus III, king of Sweden from 1275 to 1290, a more professional operation began to take place. Nobles and foreign merchants from Lübeck had taken over from farmers. The merchants transported and sold the copper in Europe but also influenced the operations and developed the methods and technology used for mining. The first written document about the mine is from 1288; it records that, in exchange for an estate, the Bishop of Västerås acquired a 12.5% interest in the mine.
By the mid 14th century, the mine had grown into a vital national resource, and a large part of the revenues for the Swedish state in the coming centuries would be from the mine. The then king, Magnus IV, visited the area personally and drafted a charter for mining operations, ensuring the financial interest of the sovereign.
The principal method for extracting copper was heating the rock via large fires, known as fire-setting. When the rock cooled down, it would become brittle and crack, allowing manual tools such as wedges and sledge hammers to be brought to bear. After the ore had been transported out of the mine it was roasted to reduce sulfur content in open hearths. The thick, poisonous smoke produced would be a distinguishing feature of the Falun area for centuries. After the roasting, the ore was smelted; the output of which was a copper rich material. The cycle of roasting and smelting was repeated several times until crude copper was produced. This was the final output from the mine; further refinement took place at copper refineries elsewhere. This process was used without any major change for seven centuries, until the end of the 19th century. It is likely that the methods and technology for fire-setting and drainage were imported from German mines, such as in the Harz Mountains.
The organizational structure of Falun Mine created under the 1347 charter was advanced for its time. Free miners owned shares of the operation, proportional to their ownership of copper smelters. The structure was precursor to modern joint stock companies, and Stora Enso, the modern successor to the old mining company, is often referred to as the oldest joint stock company still operational in the world.