Saltpeter is the colloquial name for mineral potassium nitrate. The source of the word is vague, but seems to refer to “salt stone” because that’s what it looks like.
Potassium nitrate is used in fireworks, dynamite, fertilizer, gunpowder, and other industrial uses.
There is long folklore around the usage of saltpeter to reduce sex drive in men, especially men in confined, sex-deprived situations, like the military or prison. In the U.S. Navy, for example, it is common legend that saltpeter is secretly added to the drinking water in ships (source: I served in the Navy; this was discussed, often).
However, there is no evidence that saltpeter can reduce sex drive, or has ever been used to reduce sex drive. Furthermore, there doesn’t seem to be any scientific basis – either practical or theoretical – that this would achieve the intended effect.
The source of the legend is unclear. One reason might be very adolescent: “saltpeter” sounds similar to “soft peter,” which might be a byproduct of lack of sex drive.