Short answer
The Royal Foundry is an underground area of The Town, reached through the water tunnel and now run by monks under the Bishop. You get there in the main quest Steamy Royal: talk to Herbert at the Barracks, then win Closing the Eastern Floodgate Parts I and II and Break Through to the Bathhouse Basement. Inside are a fast-travel milestone, the only Steel Ingot seller and four quests.

The Town harbour at dusk
View full-size image ↗Official promotional screenshot · © Lazy Bear Games / tinyBuild · Official media kit · Material credits
The quests that open the way
Front-of-the-Envelope Calculation (Jack, needs 60 reputation with him) ends with Jack saying he needs a way to the Royal Foundry.
Water Locked (Herbert) has you win Closing the Western Floodgate to shut the ship lock gate in the zombie-infected part of Town.
With both done, Steamy Royal begins. Its journal ends with: "I found the Royal Foundry."
Steamy Royal step by step
1. Speak with Herbert in the Barracks to prepare the foray into the water tunnel.
2. Speak with the guards at the outpost, then win Closing the Eastern Floodgate: Part I and Part II.
3. Speak with the guards again and win Break Through to the Bathhouse Basement.
That last battle is one of the few that can be started on any day, not only Sloth.
Break Through to the Bathhouse Basement
3 squads and 88 defense power are required. 364 enemies come in the waves — mostly Bucket and Wild Zombies, plus 24 Barrel, 24 Bloated and 16 Door Zombies — over about 7 minutes 20 seconds.
A win pays 3 Keys for Looters, 1 Victory Banner, 4 Zombie goo and 1 Defender's Emblem, and every zombie that fought gets 200 red tech points.
Defense power comes from the barricades and archer towers at the Barracks plus the squads you bring.

Town combat from the official media kit. The Bathhouse Basement battle opens the Royal Foundry; this is not that battle.
View full-size image ↗Official promotional screenshot · © Lazy Bear Games / tinyBuild · Official media kit · Material credits
What is inside
A Royal Foundry milestone — once activated, you can fast-travel here from any other milestone.
The Bishop, head of the monks, who sells high-quality Steel Ingots through his dialogue.
A monk who wants wine, and the portal lead the main story sends you here for.
The four Royal Foundry quests
Man of Steel (Jack): ask the Bishop about high-quality steel, then bring 3 Steel Ingots to Jack in the Town Workshop. Reward: 10 Jack reputation and 3 Town Gratitude. It leads to Factory Tour.
The Lord's Vintage (side quest): hand the monk 2 gold-quality Wine for 3 Town Gratitude.
Magic Mirror (main story, also needs Any Portal in a Storm): ask the Bishop about the magic portal, then bring him 3 Zombie Power for the Sloth portal fragment.
Steamy Royal itself is the fourth — the quest that gets you in.
Sources
- communitywikily.gg — Royal Foundry
- communitywikily.gg — Steamy Royal
- communitywikily.gg — Break Through to the Bathhouse Basement
- communitywikily.gg — Man of Steel
- communitywikily.gg — The Lord's Vintage
- communitywikily.gg — Magic Mirror
- communitywikily.gg — Front-of-the-Envelope Calculation
Related pages
Official screenshot · © Lazy Bear Games / tinyBuildThe TownGraveyard Keeper 2 Bishop
Official screenshot · © Lazy Bear Games / tinyBuildEconomyGraveyard Keeper 2 Steel Ingots and the Steel Anvil
Official screenshot · © Lazy Bear Games / tinyBuildThe TownGraveyard Keeper 2 Battles
Official screenshot · © Lazy Bear Games / tinyBuildEconomyJack in Graveyard Keeper 2
Official screenshot · © Lazy Bear Games / tinyBuildCraftingGraveyard Keeper 2 Gold Wine