You can only interact with the sniper rifle after you find the location of Ethan near the end of the game. Although you can find the sniper rifle before then, it will not be possible to interact with it and finishing the story will reset your progress. You must first find the grenade by following the train tracks over the bridge until reaching the first rock slide that blocks the tracks. Then while facing the rock slide, travel to the left. Follow the high path until you reach a location that offers a sunny view over the valley and some tree tops. In front this view a small rock with a conifer cone on top that you can interact with to turn it into a grenade. That the grenade to the dam. Walk to the third and final viewpoint to get a prompt to throw the grenade. Throw it, then go down to the river level by riding the elevator or walking along the long path. Once there, use the generator house to cross the stream near the dam, then move to the other side. If you have not already done so, disable the generator and lower the water level. Use the stairs to climb the small slope to reach a shallow bay. You will find dead diver that you killed with the grenade and his sniper rifle. Interact with the sniper rifle to place it in your inventory.
