Remember, as stated in DP, there is no source of iron in Dragon Pass. So all iron is imported and thus rare. But yes I can see iron being reworked.
Apart from Humakt the Third Eye-Blue people are the only other ironsmiths I remember being mentioned (see Apple Lane). For me blacksmiths as 'evil' foreign types forced/bribed into the service of Heortling kings has a nice resonance with myths like Wayland or Volund (in Red Cow I have a nod to these legends - the clan's master smith is a hamstrung giant).
Personally I like the 'all iron makes it hard to cast or be affected by magic' feel of HQ, unintentional or not. For me it makes a nice trade off with the doubling of the equipment bonus. Of course YGMV.
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