You can smelt it but you won't be able to cast it. find yourself a buddy that's past level 5 in metallurgy but not above level 10, then you both can practice, as you smelt then trade to him the smelted ore, he can then cast and trade the iron ingots, you should be able to reach level 5 in no time. Though you will need the PP to train. Once you can cast for yourself resmelting and casting to level 10 is not too bad, then once at level 10 you can cast iron/steel stock and combine iron and coal in the furnace. If you aquire enough PP and money train your strength stat so you can carry a larger load of ore.
BTW, i did not see you mention it, the metallurgy skill needs a book too. If you don't have it, you might want to start with that quest.