In large commercial applications (I have a friend who runs a crematorium) that is pretty much how it is done. The principle is pretty much the same as the mesh and re-bar in concrete.
I have plans for some of the 2000 pounds of Cast-O-lite 30 that the above friend gave me and will cast some reinforced forge liners someday. These can be used for vertical salt pots, half dome forges, and large diameter welding forges. If the results are robust, as I expect, I may make and sell forge kits with cast liners. You make a mold, add the reinforcing mesh, and cast the refractory. This makes a very strong refractory liner. Wrap the liner with a couple inches or ins-wool and wrap a thin sheet metal jacket around that. It is almost exactly how a water heater is built. Because the wool and case are separate from the liner, the forge can be disassembled and the liner can be changed or repaired without having to replace the insulating wool or build a new forge.
The other good part is that when making one, it is almost as easy to make two or three, so the spares can sit on a shelf or in a corner until they are needed.
For those thinking of doing this, be aware that a large cast liner for a welding forge can weigh several hundred pounds. An 8" ID by 24" liner 1" thick weights about 80 pounds. After curing and firing, it looses maybe 20 pounds.
An aside on the subject. Some may remember a build article online about 15 or so years ago of a forge built outside the shop of a smith in Mexico. The fellow made a base from a pile of sand. He made a big roll of blankets and stuff and used it as a form to apply home made refractory over. The refractory was ash, clay, sand, and Portland cement. Once he had a 1" shell, he pulled out the blankets and filled the inside bottom with the refractory, creating a roughly round chamber. Then he put chicken wire loosely over the outside. Next he built up a couple more inches of refractory and wire. He topped this off with about 6 inches of a loose insulating mix of crushed pumice rock and clay. The whole thing was covered with more chicken wire and adobe. It looked like a big bread oven. He white washed it and stuck a big pipe burner in the back that ran off a large propane tank. He could get it to welding heat in an hour or so and run it all day with the outside not getting too hot to place a hand on. He stacked home made firebricks to close off the back and front as needed to make the chamber hotter or cooler. It was black all around the openings, but still white on the top and sides.
Shows what ingenious people can do when they have to use what is locally available.
