Iron and manganese are concentrated in water by contact with certain rocks and minerals, and occasionally man-made materials such as iron and steel pipes. The longer the contact times with the rocks and minerals, the higher the level of concentration. Ground water supplies usually are what require treatment for high levels of iron and manganese. When exposed to air, iron and manganese are very reactive and break down rapidly. For this reason, you will not find them in streams or rivers, they react with oxygen to form particles and fall to the bottom of the stream. Ground water reacts with oxygen when brought to the surface of a well, and will, at that point convert to visible reddish/brown/black particles and move through the pipes of your home.
Frequently, hydrogen sulfide, a rotten egg smell, also is present in water that contains iron and manganese. When hydrogen sulfide is present in small quantities, it often will be detected after it goes through a chemical change in the hot water heater.