With a few basic welding and cutting skills and careful attention to some safety precautions, you can build a backyard metal smelter. Once built, you will be able to melt just about any type of metal. This design is specifically for smelting iron ore, which requires an intense heat to cause the iron to separate into a workable bloom, but if you research the specific melting temperature of other metals you can purchase the correct crucibles to be used with this metal smelter.
Stand your water heater up in an open and well ventilated place. Make sure it is stable and that you can open the bottom vent to the heater without causing it to tip. Weld supports to the outside of the heater if necessary.
If your water heater does not have an opening that will fit your tuyere (a pipe or fitting designed to withstand the heat of the fire while allowing air to be introduced to the smelter) about half way up the body of the heater, use your propane torch to cut a hole in the heater. Insert your tuyere far enough that a weld will hold it firmly into place but when the hose to your air compressor is attached neither the hose nor the attachment will come closer to the heater body than 2 inches. Once you have your tuyere positioned correctly, weld it into place.
Connect the propane gas line to the flame spigot and then to the propane fuel supply. Turn on the gas and light the flame. Place the spigot so the flame is directed into the interior of the water heater. Let this preheat your smelter for about three to four hours.
Once your metal smelter is preheated, remove the propane line and turn it off.
Turn on your air compressor and release a steady push of air through the tuyere and into the heater.
Now, place your charcoal in the bottom of your metal smelter and light them on fire. Continue stoking the fire until the flames are burning steadily to the height of the tuyere.
Begin to add iron ore to your charcoal fire. Slowly as to not put out the fire, add charcoal as necessary or increase air through the tuyere to maintain the proper height of the fire. Continue adding iron ore and charcoal.
Scrape the bloom (the iron slag) that forms on the walls beneath the tuyere and remove it from the smelter.
When the gasses that become trapped at the top of the heater begin to catch fire, your smelter is at optimal working heat.
Be extremely careful while working with the smelter and when it is cooling. A smelter will reach temperatures of 900 to 1200 degrees C.