The extention of the Deeside Railway (built in 1853) up into the Dee Valley was first authorised on 16 July 1846, but the financial problems encountered meant that the section west of Banchory was abandonded until 1859. Initial plans were for the extention to serve Kincardine O'Neill to the west of Banchory, but in order to save costs the route was diverted to the north, serving Torphins & Lumphanan. The new route avoided two expensive crossings of the River Dee, and the land was cheaper to buy. However trains faced a stiff climb from Banchory through to the summit just above Lumphanan.

The extension as built included a masonery viaduct at Blarnacrag (known as the Beltie Viaduct) and a deep cutting at the summit known to drivers as Satan's Den, which was frequently blocked by snow during winter. Just to the west of the summit was Auchlossan Crossing, where on the week before the last goods train to Ballater the crossing gates were torn off by a train failing to brake in time! The crossing gates were replaced with strands of wire adorned with pieces of red cloth in time for the last goods train.