You get the tools from the dwarves and break them at that same camp at 32, 48. The anvil is at the back left corner of the camp.
Quest
Dwarven Digging
A World of Warcraft quest in Mulgore. Facts and objectives from the current retail game data.
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If you are having trouble getting to the forge at the dwarven camp, you can always go to Thunder Bluff and use the forge by the blacksmith to create the broken tools.
Each [Prospector's Pick] produces one piece of [Broken Tools]
Quest facts
The client quest POI data records no map location for this quest, so no map is shown.
Check whether you have already completed this quest
in-game: /run print(C_QuestLog.IsQuestFlaggedCompleted(746))
Description
There are dwarves preparing a dig site to the northwest. They think secrets lie in the earth, and that is true, but hollowing and defiling the land is no way to earn its teachings. Collect the dwarven tools of digging, smash them, and return to me with the dwarves' broken tools. You can smash the tools at a forge. You will find one in Thunder Bluff, but any forge -- even a forge at the dwarven camp -- will suffice.
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Reward details
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Reputation: Thunder Bluff +250
Baine Bloodhoof leads his people, the proud Tauren, from this mighty Horde capital.
Reputation group: Horde.
Other quests in Mulgore that reward Thunder Bluff reputation: Dangers of the Windfury (+250), Preparation for Ceremony (+250), The Ravaged Caravan (+150), Swoop Hunting (+350), The Venture Co. (+150), Supervisor Fizsprocket (+250).
Item facts are the current retail client’s (ItemSparse); the specialisations for a pick-one item are the ones the Blizzard quest API lists; faction and currency text is the client’s own. Lowest listed price = the US commodity auction house now.