Magical forging was part of blacksmithing, but the process was different. Bai Zemin had received this knowledge when his passive skill Blacksmithing reached level 5, otherwise he would not have been able to forge magical weapons.
During the process of magical forging, he needed to focus his mind while controlling the Mana inside his body to with his Magic gradually begin to connect the energy inside the Soul Stone with the lower part, in this case a blue bone of a First Order beast, which would form part of the magical tool.
