* Vale said to resume iron ore mine with 30 mln T capacity
* Restart of mine would alleviate supply concerns - Jefferies
* China’s iron ore inventory at ports rose to 6-mth high -SteelHome (Updates prices, adds chart)
BEIJING, March 20 (Reuters) - China’s iron ore futures plunged nearly 6 percent on Wednesday, their biggest intraday fall in three months, on expectation of higher supply as Vale SA is set to resume work at its largest iron ore mine in Minas Gerais state.
The Brazilian miner said on Tuesday a local court had cleared the way for it to resume operations at the Brucutu mine, which has been halted since early February after the collapse of a dam killed 300 people.
The mine has an installed capacity of 30 million tonnes of iron ore, or around 8 percent of Vale’s planned annual production in Brazil. The miner now needs approval from local authorities to resume work.
“It is not clear to us whether a restart is now imminent... if this mine does come back online, it would alleviate some of the expected tightness in the iron ore market,” analysts from Jefferies said in a note.
Market were expecting at least 64 million tonnes of output reduction after Vale said last week it would cut production further.
The most-traded iron ore contract on the Dalian Commodity Exchange slumped as much as 5.7 percent when the market opened. It settled down 3.8 percent at 613.5 yuan ($91.40).
Meanwhile, Australian iron ore miners increased shipments while their Brazilian rival was struggling to cope with operation disruptions.
Inventory of imported iron ore at Chinese ports increased 550,000 tonnes last week to 148.2 million tonnes, the highest since late September, data compiled by SteelHome consultancy showed.
Benchmark Shanghai rebar futures fell 0.5 percent to 3,777 yuan a tonne, while hot-rolled coil prices dipped 0.4 percent to 3,688 yuan.
Coking coal futures lost 1 percent to 1,225 yuan, but coke edged up 0.2 percent to 1,968 yuan.
($1 = 6.7125 Chinese yuan renminbi)
Reporting by Muyu Xu and Dominique Patton; Editing by Subhranshu Sahu and Rashmi Aich