I have to wonder who the first ancient people were who discovered how to do this. Ancient people had a lot of intelligence to figure stuff like this out all by themselves. It's amazing.
In all probability, someone made a brick oven with some rocks containing Copper Ore. After the charcoal baked a few lumps of malleable, sharp-edged substance out of the stone I imagine the rest just followed.
PS - Did you know they recently discovered Damascus Steel originally contained organic Carbon Nanotubes? Cool stuff.
There was a great description of making watered steel in Neal Stephenson's The Confusion where they all have to save up their urine for the cooking process to produce phosphorus, and pass out repeatedly from the stench. I will never look at kitchenware quite the same way again.