<SpellDef InternalName="EnchantedHammers">
        <DisplayName>Enchanted Hammers</DisplayName>
        <Description>Adds +1 Material to the city</Description>
        <Image>S_Inspiration_Painting.png</Image>
        <IconFG>S_EnchantedHammers_Icon.png</IconFG>
        <IconColor>255,223,114</IconColor>
        <AutoUnlock>1</AutoUnlock>
        <SpellBookSortCategory>City</SpellBookSortCategory>
        <SpellBookSortSubCategory>CityEnchantment</SpellBookSortSubCategory>
        <SpellType>Strategic</SpellType>
        <SpellClass>ImpResourceBooster</SpellClass>
        <SpellSubClass>Other</SpellSubClass>
        <SpellTargetType>FriendlyCity</SpellTargetType>
        <Prereq>
            <Type>AbilityBonusOption</Type>
            <Attribute>Earth1</Attribute>
        </Prereq>
        <SpellResourceCost>
            <Resource>Mana</Resource>
            <Amount>10</Amount>
        </SpellResourceCost>
        <GameModifier>
            <ModType>Resource</ModType>
            <Attribute>TileYieldMaterials</Attribute>
            <Duration>-1</Duration>
            <PerTurn>1</PerTurn>
            <Value>1</Value>
        </GameModifier>
        <ValidTerrainCategory>City</ValidTerrainCategory>
        <AIData AIPersonality="AI_General">
            <AIPriority>120</AIPriority>
        </AIData>
        <HitSoundFX>Spell_EnchantedHammers_01</HitSoundFX>
        <SpellDefEffect>
            <EffectName>S_AuraofMight_Particle</EffectName>
            <LocalPosition>0,0,0</LocalPosition>
            <EffectScale>.75</EffectScale>
            <EffectDelay>0</EffectDelay>
            <SnapToTerrain>1</SnapToTerrain>
        </SpellDefEffect>
    </SpellDef>

I don't see anything in the XML that would specifically prevent EH from being cast on a city built on forest terrain, but it definitely doesn't work.

Didn't try with other city enchantments, so it could be a more widespread problem.

Save game.