Can we make a rusting battery Since in rusting (oxidation) of Iron, transfer of 4 electrons takes place is it possible to use this reaction under catalytic conditions to create a simple electric cell, even if it just gave a millivolt of potential.

$\ce {Fe + H2O -&gt; FeOH3 + H2}$

Considering that we have complete control over the surroundings, like volume expansion, disposing hydrogen and other such factors.
Sure! A nickel-iron battery uses the oxidation of iron at the negative plate to produce about half the voltage. Though invented by Jungner, it's often called an Edison battery. See http://en.wikipedia.org/wiki/Nickel%E2%80%93iron_battery.

There are very low power semiconductor devices which could be powered by an iron battery. You could make three or four small cells from iron nails and a more electronegative element, e.g. lead, to power a digital watch; even without optimization to remove layers of hydrogen and rust, it should operate for months. 

For some other low power ideas, see https://www.enocean.com/en/energy-harvesting/.