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Just today, a new version of Minecraft was released. It features a few bug fixes, updates to the attack damage indicator added in 1.9, sword attacks, and Elytra functionality. It also adds Iron Nuggets.

What are Iron Nuggets? How can they be used? Can they be found in chests?

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An Iron Nugget is a craftable, renewable, non-placeable item. It has a texture resembling that of the Gold Nugget, recolored and turned 90° to the left, to prevent mistaking the item as a Ghast Tear. Its ID is minecraft:iron_nugget.

There are only two methods to obtain Iron Nuggets:

  1. Crafting an ingot to get 9 nuggets.
    Crafting an Iron Ingot into Iron Nuggets.

  2. Smelting any iron tool or any iron or chain armor, including horse armor, obtains a single nugget.
    Smelting a chain helm into an iron nugget.

There are four other recipes involving Iron Nuggets as a component: Iron Ingots, Chains, Lanterns and Soul Lanterns:

Iron Ingot, Chain, Lantern and Soul Lantern crafting recipes

Image source: Minecraft Wiki

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    Your question states: "Can they be found in chests?". Since this is a self-answered question, I expected your answer to explicitly answer that part as well. – Mast Dec 21 '16 at 23:40
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    @OganM smelting ANY iron tool or armor results in ONE nugget, period. – user64742 Dec 22 '16 at 4:28
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    @Mast In my view, "It can be obtained by two methods" followed by two methods that do not mention chests answers that part quite nicely. I've proposed an edit it to make it more clear that these are the only two methods. – Daniel Wagner Dec 22 '16 at 8:23
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    If I did my math right, this means smelting an almost broken hoe or a sword is slightly more efficient then repairing them. This is not true for pickaxe or axes – OganM Dec 22 '16 at 21:52
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    Some recipes were added in much more recent versions that use iron nuggets - lanterns and chains, to be precise. Should the answer be updated? – Egor Hans Apr 22 at 9:49
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The iron nugget is something you can obtain from smelting any iron materials:

Smelting iron items to nuggets

Then, if you have 9 iron nuggets, you can craft an iron ingot:

Crafting nuggets into ingot

I don't know why you would, but you can actually craft an iron ingot into nuggets too, if you just put an iron ingot into a square of the crafting table:

Crafting ingot into nuggets

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