The history of the founding of the camp is connected with the initiative by the German chemical concern IG Farbenindustrie A.G. to build its third large plant for synthetic rubber and liquid fuels. The new camp was to be located in Silesia, beyond the range of Allied bombers at the time. Among the several sites proposed in December 1940/January 1941, the final choice fell on the flat land between the eastern part of Oświęcim and the villages of Dwory and Monowice. The decision was justified by the favorable geological conditions, access to railroad lines, water supply (the Vistula), and the availability of raw materials: coal (the mines in Libiąż, Jawiszowice, and Jaworzno), lime (Krzeszowice), and salt (Wieliczka). Furthermore, the belief that it would be possible for the firm to employ prisoners from the nearby Auschwitz concentration camp was by no means a trivial consideration, and may in fact have been decisive in the choice of the project.
IG Farben put the pieces of the deal in place between February and April 1941. The company bought the land from the treasury for a knock-down price, after it had been seized from its Polish owners without compensation; their houses were vacated and demolished. At the same time, the German authorities expelled the Jews from Oświęcim (resettling them in Sosnowiec and Chrzanów), confiscated their homes, and sold them to IG Farben as housing for company employees brought in from Germany. Some local Polish residents were dispossessed in the same way. Finally, IG Farben officials reached an agreement with the concentration camp commandant on hiring prisoners at a preferential rate of 3 to 4 marks per day for the labor of auxiliary and skilled construction workers. In a letter to his colleagues about the negotiations, IG Farben director Otto Ambros wrote that “our new friendship with the SS is very fruitful.”