I can only guess from First Principles: Like the dots, a semi-circle could be deeply engraved with an internal lip and an alloy heated and hammered into the depression. Hopefully, someone who really knows how to do the inlay can join in to correct my guess. The raised part looks corroded/rusted? so the alloy may be a low grade iron. What alloy would react like that; relatively soft and oxidable? Of course this process may be made of Whole Cloth. :-)
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