Rust needs to be reduced back to ore, using a reactive, usually coke. Coke is purified coal. Coal is a fossil fuel. You can do it with charcoal, which can be made by burning wood, so it’s possible without coal, just not as efficient. This assumes you can gather the rust - it tends to break down and disperse into the environment, but if you broke up concrete to get at rusted rebar and could collect the rust, you could reduce it with charcoal.

Again, it’s a matter of scale. We mine iron and deposits because we can get large amounts in seams. If you’re trying to harvest rust and reduced it with charcoal, you’re producing iron on the scale of making knives and swords, not cars, or combine harvesters, or more rebar.

It’s a chicken-egg problem. We have been able to come as far as a have because oil, coal, and iron were just laying around on the surface, in huge quantities. Those are gone, and now you need the big tools first to get at the reserves that are left.