In the early years of the twentieth century the need for coal was growing both in America and Europe, and local business men in Wales were looking for new opportunities to fill the demand.
Among these were a group known as the Tredegar Iron and Coal Company, made up of wealthy industrialists from the Maclaren, Markham, Pochin, Whitworth and Wyllie families. They decided to create a group of collieries in the Sirhowy Valley, which explorations had told them contained rich seams of " black gold." One of these was at the small rural hamlet of Rhiw Syr Dafydd.
Work began clearing the site for the new colliery at Oakdale with the sinking of the pit in 1907. Waterloo shaft followed in 1911 and the building of the village commenced soon after, to house the families of the men who were to work there.
The revolutionary "model village" was the brainchild of the manager of the Tredegar Iron and Coal Company, Mr A S Tallis. This village, in contrast to others in the area, was to be built away from the mine among green fields. The houses would be modern, with hot and cold running water, large cooking ranges, electric light, and - perhaps most revolutionary of all - bathrooms. Every house was to have a front and back garden, so that no front door would open directly on to the street as in other valley towns and villages.
These ideas were in themselves original enough. But the concentric design of the village that was conceived by Mr Tallis' brother-in-law, Mr F R Webb, was even more radical. It was laid down with a central road (Central Avenue) and transverse roads conforming to a horseshoe shape, with linking "spoke" roads, making any road in the village easily accessible from any other.
It has been described by John Newman as "by far the most ambitious attempt by any mining company in south Wales to provide planned housing for its workforce."
The build commenced with housing, but later included schools, chapels, a hospital, a miners' institute and a cinema (the Picture House).