Primitive technology has put out several videos about smelting iron, it's very interesting! It shows how labour and energy intensive it is. The quantity of charcoal he uses to obtain few grams of iron !
He literally only works with what he can gather and make himself from the area he works in, which is a forest in the north of Queensland, Australia. So the charcoal is made from the local trees in a furnace made from clay from the banks of the nearby river, and the slime is iron bacteria that grow in the river
It is probably the first source of iron used by humans. These sludge/mud sources are pretty clean concentrated sources of iron oxides because of how they form.
It is just easiest way to make iron, they aren't used now because there's not much iron in them.