The Alchemy Forge was created in ancient times through the combined efforts of the Neox and the Exathi, a race of skilled craftsmen. It was used to create a passageway to Craggy Peak, by making clouds out of Zol. Following the sealing of Alchemy, the Forge became inactive. This would lead to the Ei-Jei region becoming a desert-like area, while the town of Passaj falls on hard times.
Matthew's party is able to reconnect the Forge's circuits and fire up the forge by shooting it with a Fireball. However, they are unable to use the Forge because it requires the Sol Mask to be fully functional. The group theorizes that this safeguard allowed the Neox to ensure that only they or their allies could control the Forge.
After receiving the Tree Flute from Baghi, Matthew and friends recruit Amiti and enter the Ouroboros to retrieve the Sol Mask. In the process they learn of the Alchemy Well in Ayuthay and of its ability to run in reverse. Upon returning to Passaj, Matthew's party does manage to start the machine, which transforms the town into a fortress by raising high walls around the town. It also combines its powers with those of the Alchemy Well and brings water to the entire Ei-Jei region.
Matthew's party then attempts to go to Craggy Peak, but is unable to as the clouds formed by the forge are too wispy and dry. This prompts them to seek the Ice Queen Stone, which enables the Forge to be reversed, and thus passage to Craggy Peak is made possible.