Responding to competitive pressure the company obtained authorisation to connect its network to Swansea and Carmarthen, but the failure of a contractor put the company into financial difficulty, and a financial reconstruction later led to the Swansea and Carmarthen lines passing to the London and North Western Railway, while the original core system was taken over by the Great Western Railway.

Alexander Raby purchased mineral-bearing lands about 1795 and constructed tramways to bring the minerals to a smelting plant he owned at Furnace, near Llanelly.

The tramways were wooden waggonways, and they extended to a harbour at Llanelly for onward transport of the finished product by coastal shipping.

There were extensive deposits of anthracite coal at Llangennech on the River Loughor estuary east of Llanelli, and about this time an expansion of the mining there took place, with associated construction of short tramroads.

However the available quays were suitable only for small vessels, and the main trade was lighterage to Llanelly Harbour for transhipment, incurring additional expense.

The proprietors of the Llangennech Coal Company promoted a bill in Parliament, to make a wet dock for vessels up to 300 tons at Machynis with wharves and warehouses, and build the railway to St Davids.

[3][page needed] Priestley[page needed] reported on the act: This work was projected for the purpose of conveying the minerals and other productions of the country near its line to the sea, and the dock was for the readier shipment and landing of the exports and imports to be conveyed thereon... [By the authorising act] the proprietors are incorporated under the style of "The Llanelly Railroad and Dock Company.”...

In fact the seam at the St Davids pit proved more elusive than expected, and was finally found in June 1832 at a depth of 660 feet, the deepest in Wales at the time.

The existence of the railway and the dock quickly led to considerable business, especially in the foreign export of coal; the East India Company was a particularly important customer.

[3][page needed] The (Great) Mountain branch opened on 6 May 1841 to goods and mineral traffic only; the route, included a half mile balanced cable incline at a gradient of 1 in 12.

[3][page needed] In 1850 the passenger trains on the line appeared in Bradshaw's guide; stations were at Llanelly Dock, Bynea, Llangennech, Pontardulais, Cross Inn and Garnant.

By this time the South Wales Railway (SWR) was constructing its 7 ft 1⁄4 in (2,140 mm) line from near Gloucester to Fishguard.

The Llanelly had experienced difficulty in obtaining subscriptions to complete its intended line to Llandilo, and for some time held out for the purchase by the SWR of its entire network for £230,000.

An exchange goods shed was built at the SWR station, served by a spur from the Llanelly Railway, opened in June 1853.

[1][page needed] The company now returned to the extension to Llandilo; with the financial performance improved, it was possible to seek further finance, and in 1853 it obtained the Llanelly Railway and Dock Act 1853 (16 & 17 Vict.

Included was the possibility of building it to the broad gauge and converting the existing network similarly, leaving open the option of selling the concern to the SWR.

In 1853 a parliamentary bill had been presented, and as it was unopposed, its passage easily led to royal assent being granted to the Vale of Towy Railway Act 1854 (17 & 18 Vict.

c. cxlvii) came into force on 2 August 1858 and authorised the Llanelly Railway and Dock Company (LR&DC) to lease the Vale of Towy line.

c. clxii), giving authorisation to extend to Brynamman, approaching from the east; this part of the line was known as the Swansea Vale Extension Railway, and it opened on 1 January 1864 for mineral traffic.

The Llanelly Railway and Dock Company announced that passenger services would start on 20 March 1865; Garnant station appears to have been closed, and was relocated "half a mile down the branch" and re-opened at the same time.

Richard Kyrke Penson, Thomas Savin and a man named Johns proposed that the LR&DC promote railways from Pontardulais to Swansea, from Llandilo to Carmarthen, and from Llandovery to Brecon, which they would finance.

Accordingly, they would take a ten-year lease of the Llanelly Railway and Dock; at the time the LR&DC was only earning 1% and an apparently guaranteed 4% (after five years) appeared very attractive.

[5][page needed] The LR&DC directors favoured Penson and his partners, and the arrangement was agreed at a shareholders' extraordinary general meeting on 31 October 1860.

Having lost their source of finance and project management, the LR&DC proceeded with the Swansea and Carmarthen lines themselves, running into considerable practical and financial difficulties from landowners and otherwise in the process.

[5][page needed] Proposals were worked up for a new line from Pontardulais to Swansea, taking a southern sweep through Dunvant, where there were said to be extensive unworked coal measures.

Construction of the line was considered to offer no great difficulty, but the Board of Trade inspector's report of May 1865 required considerable improvements before opening.

[note 5] The failure of the financing scheme had forced the Llanelly Railway and Dock Company into borrowing at high rates of interest.

[6][page needed] A series of petty disputes over working arrangements and charges arose, and the LNWR announced that it (through the Swansea and Carmarthen Railway) would start operating the train service on the Vale of Towy line.

[5][page needed] The St Davids colliery, which had been the original purpose of the first Llanelly Railroad and Dock Company, was no longer the principal location for coal extraction in the area, and the incline operation was inconvenient.

[6][page needed][8] For many years the Great Western Railway had suffered from congestion in the Swansea area; a particular difficulty was the severe gradients at Cockett which required heavy trains to be banked and resulted in lengthy line occupation times.