Long ago the tower used to produce a seemingly endless supply of iron. The King used it to create iron soldiers and an iron castle. Legend has it that he even tried his hand at forging a dragon out of iron.
Found in the Brume Tower, on an ash-filled platform packed with corpses.
After the Scorching Iron Scepter contraption is activated, take an elevator down one level. Go through the doorway leading outside, the key is on a corpse on the far side of the ashen platform. There are three Iron Warriors that will emerge from the ash.