When the caravan stops, march into the tunnel (first left, and onwards), in which mysterious, red eyes are gleaming. When it turns out that it's bats and Kate runs, approach Ayawaska and Kurk - they're standing on the track to the right.
Talk the situation through with them - and then climb onto the platform (there's an active point right there - we've highlighted it above). Go to the passage on the right. Turn left and again down the stairs - you will get to a location flooded with greenish water.
First, make a couple of steps to the left and pick up the seaweed next to that big column. Then go all the way to the right - you will meet one of the Youkols (talk to him); he will give Kate a root. Go back to the exit - left, and up the stairs to the platform. Check out the blacksmith table right at the exit.
Crafting a torch
Since the smith is nowhere to be seen, go ahead and swipe the lighter and bottle with some sort of substance. Get down to the tracks and go towards the caravan (vis-a-vis the tunnel with the bats).
Approach the ostrich cuddled by a Youkol, and take a cloth from the yurta on its back.
Go back to the smith's bench (you can take the stairs next to the ostriches) and zoom in on the work surface. Into the hole on the right, stick the wood you've just gotten from the Youkol. Wrap the tip of it with the cloth and pour the liquid from the bottle on it. Light it up with the lighter. When Kate takes the torch, go towards the bat tunnel - on your way, you'll have to get down onto the tracks. Go inside the tunnel to scare off the bats. Unfortunately, it won't be permanent.