Your tiny person will not find pellets of metallic iron in the dirt. Iron will rust on the surface.
But he might find gold, and even better, copper. The North American Indians (Mound Builder culture) extensively worked copper with no use of heat - all by cold hammering. https://en.wikipedia.org/wiki/Metallurgy_in_pre-Columbian_America#North_America
Here is a copper breastplate taken from a mound tomb in Georgia.
http://www.burlingtonnews.net/centerindiansa.html
[![copper birdman breatsplate][1]][1]
So too your tiny people. They can work nuggets of copper and gold into plates using rock hammers like the Indians did. A tiny nugget will go a long way for an antsized person. No need for forges or dangerous heat.
[1]: https://i.sstatic.net/N1LH7.png
