"the iron that makes up a infernal machines grows on trees, pours out of infernal fountains, floats on top of the rivers "
You're pretty close to the real world, really ... it's called Bog Iron, and it is found in swamps and bogs as a result of the natural activities of plant life. It was in fact the primary source of iron in the not-so-long-ago days. And it is renewable. I've always found bogs and swamps to be kind of magical, with will-o-wisps flitting about and the Mad Hermit living in his hollow tree, but alas, Larian is moving away from the rich landscapes of early D&D that existed long before the Forgotten Realms.
