"Used to bypass certain doors on Sudra."
The Sudran Key is an ancient Sudran technological key used to raise/unlock certain doors/seals on Sudra (only seen in E-Kur-Mah ingame). Its most significant use in Axiom Verge is granting the player access to the lower portions of E-Kur-Mah and ultimately the Red Coat.
When Trace gets to a Sudran Seal, Elsenova tells him that he needs a special key to bypass it:
"Trace, I have seen this kind of barrier before."
"It requires special key to bypass. Physical object, carried by Sudrans."
It appears to be a purple anodized metal circle (sphere?), with a diamond shaped pale red flashing object encased inside.
There is no method in-game to manually "use" the key. After obtaining it, the yellow doors in E-Kur-Mah that were previously blocking the player's path will be automatically open.
In the game code it is referred to as "Breach Suppressor". Perhaps it was intended to aid in the final battle instead of being a key for E-Kur-Mah in a previous build of the game.
The Sudran Key can be found in the largest upper-right room in E-Kur-Mah. The player will need to drill through a maze of blocks (using either the Laser Drill or Remote Drone order to obtain it. The Sudran Key is always in the same location in the maze.