The first record of the occurrence of certain transparent crystals at Helgustaðir farm, Reyðarfjörður, East Iceland, dates from 1668. In the following year R. Bartholin of Copenhagen published an essay describing their properties, among which was a strange double refraction. The Icelandic crystals were studied further by C. Huyghens of the Netherlands and I. Newton around 1700. The former suggested that a point wave source in these crystals gave rise to two wave surfaces, one being ellipsoidal.
Not much happened in relevant fields in optics in the 18th century, but the Iceland crystals played a part in certain developments in crystallography in 1780-1820, notably R.J. Hauy's law of rational proportions. The crystals turned out to consist of calcium carbonate; the variety (fundamental cleavage rhombohedron) which is typical for Helgustaðir but is relatively rare elsewhere, is generally known as Iceland spar.
Huyghen's suggestion was tested by W.H. Wollaston over a century later. Wollaston's publications in turn prompted an 1808 prize competition by the French Academy of Sciences on the subject of double refraction. The competition led to major discoveries concerning the transverse nature of light, its varied interactions with matter, light propagation in crystals, the symmetry of crystals, and many other subjects during the next two decades. Among scientists involved were E.L. Malus, A. Fresnel, F. Arago and J.-B. Biot in France, and D. Brewster in Scotland. Further theoretical and experimental developments, where G.G. Stokes and F.E. Neumann deserve special mention, occurred up to 1845. Nicol prisms which separate the two orthogonal components of light vibrations, were invented in 1829 and soon incorporated into polarimeters and other devices. In the meantime, Iceland spar contributed significantly to understanding of crystal physics on several fronts, particularly regarding the concept of anisotropy.
In the late 1840's Nicol prisms were a key element in two important discoveries. L. Pasteur found a connection between certain symmetry aspects of crystals and their optical properties, which later revolutionized organic chemistry. M. Faraday observed that magnetic fields affected light propagation in matter; this observation along with J.C. Maxwell's own research with Nicol prisms may have hastened the development of Maxwell's electromagnetic theory of light (early 1860's).
Late 19th century developments in optics and in optical techniques employing Nicol prisms were numerous, including petrographic microscopes; scattering of light; photoelasticity; optical properties of metals and thin films; electro-optic effects; and new magneto-optic effects including the Zeeman effect which promoted new understanding of light emission and atomic structure. Iceland spar was the first crystal whose elastic and inelastic deformation was studied in any detail.
In the early 20th century Iceland spar served as a length standard for X-ray diffraction. Nicol prisms were used extensively in various kinds of instruments: polarimeters in academic, industrial and medical laboratories; many crystallographic/mineralogical/petrographic devices including reflected-light microscopes for the study of ores and metals; photometers for measuring the intensity of light; and very fast light switches (Kerr cells).
Up to the early 1920's the Helgustaðir mine appears to have supplied almost all the Iceland spar crystals used in the construction of Nicol prisms, and many of those used in other research. The crystals were collected sporadically until the mid-19th century. Organized quarrying by local entrepreneurs took place in 1855-60 and especially in 1863-72. After acquisition of the site by the State in 1879, extraction was carried out at intervals in 1882-1925.