The smelter is part of artifacts, it is disabled in the game even tough you get artifacts as prizes
Normally after you have 1000 of each item you should be able to add the powerfull artifact to your hero. this would be possible by clicking the artifact item in your bag.
in the screenshot you see the alchemy workshop, there you can buy the artifacts shown.
However, you can buy them and even get artifacts as prizes you can do nothing with them as the developpers disabled it.
To say it more clear you wasted all diamonds as they will never fix it.
