Stone age people were mining for flint and copper with antler picks before iron was discovered.
Perhaps someone more knowledgeable than I can answer this. Rather than spending hours grinding an edge on the knife, and removing a lot of hard-won iron, why not hammer the blade to a basic edge, then do the final sharpening on a smooth rock?
Hot forging might be beyond the capabilities of this level of technology, but cold forging should be adequate to draw soft iron down to a usable edge. This in fact is how sickles and similar tools were sharpened up until the 19th century.
