Renewed shall be blade that was broken,
Refers to the sword known as Narsil. Narsil was destroyed (broken in two pieces; in the Peter Jackson film, multiple pieces) in the killing of Sauron at the beginning of The Fellowship of the Ring.
Elrond, fulfilling the prophecy, reforges Nasril as Andúril (“flame of the west”)
Tolkien was inspired to create Narsil/Andúril based on the tradition in western mythology of famous swords, such as Durendal (wielded by Roland), Joyeuse (by Charlemagne), and of course the mythical Excalibur (King Arthur).
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