These small 18-19th century pig iron furnaces took coal or charcoal and crushed iron ore and with forced air smelted it into pig iron poured into a bed of sand.  They are not large as you can see, and could be easily "compressed" in scale to make a fabulous railroad industry.  I think a tealight's flickering led could be repurposed in the furnace to give a pleasing  flicker.  the main furnace chimney simulated with styrofoam, and a bit of wood and paper construction would do fine for the shed like building.  some figures working, and a stack of pig iron  by the tracks would make it complete!