Fly up to it and smash the Green Magic Crystal on it.
Head to the left side of the dam from where you start and you should spot a wooden platform on a square stone structure the furthest left you can go. You don't get hurt if you hit the water like you would in the previous two games so there's no worries there. They're not particularly strong so fly about meleeing and breathing on them until they explode into gems. The first thing you'll probably want to do is take care of the four Wyverns that are following you.
