Although Norse people knew of mining and mined some iron ore in a variety of locations throughout Scandinavia, most Norse era iron was smelted from bog iron. For example, at the Norse settlement in L'Anse aux Meadows in Newfoundland, there is clear evidence that Norsemen harvested and smelted bog iron to use as the raw material for the iron rivets they used to repair their ships there 1000 years ago. Where streams run from nearby mountains through a peat bog, bog iron can almost always be found. That combination was probably visible to Norse explorers even from on board their ships in the cove at L'Anse aux Meadows. It occurs in glaciated regions throughout the world, and so would have been very familiar to the Norse.
Streams carry dissolved iron from nearby mountains.
In the bog, the iron is concentrated by two processes. The bog environment is acidic, with a low concentration of dissolved oxygen. The acidic environment of the bog causes a chemical reaction forming insoluble iron compounds which precipitate out. Anaerobic bacteria growing under the surface of the bog concentrate the iron as part of their life processes. Although the iron nodules are reasonably pure, there aren't many of them.