Reinforcing bar and mesh often arrives on site with some rust on it. This is quite normal: hot-rolled bars and coil have a layer of what's called mill-scale on the surface when they leave the mill. This mill-scale provides a protective layer in the right conditions but if stored externally or if the steel has been handled, this mill-scale may be disturbed leading to light rusting.
Generally speaking, rust on your reinforcing steel isn't a problem where it's formed by fresh water and research has demonstrated that a light coating of rust may actually help to increase the bond with concrete. The Australian Standard makes this clear:
AS 3600, Clause 19.2.4 states: “At the time concrete is placed, the surface condition of reinforcement shall be such as not to impair its bond to the concrete or its performance in the member. The presence of millscale or surface rust shall not be cause for rejection of reinforcement under this Clause.”
When rust might be a problem
There are a few instances where rusting of reinforcing steel may create structural or aesthetic issues:
Rain may wash rust off reinforcing steel laid in formwork such that it stains visible concrete. In this instance, the SRIA recommends removing loose rusted material prior to pouring your concrete or for more significant applications, using galvanised steel
Salt water can cause a more serious corrosion issue that may render the rebar or mesh structurally unsuitable. Where you have reinforcing steel that's been subjected to salt water and has visible rust it is important to treat it by using high-pressure washing to remove salt and loose corrosion and in severe cases the steel may need to be replaced. If in doubt, conduct strength and cross-sectional area limitation tests.
Want more information? See the SRIA Technical Note on rusting: http://www.sria.com.au/_literature_93680/Technical_Note_1