UK's FTSE rebounds, led by mining shares; CRH slips

* Blue-chip FTSE 100 index up 0.4 percent

* Miners gain on comments from Chinese Premier

* CRH (NYSE: CRH - news) shares drops on Holcim (Other OTC: HCMLF - news) -Lafarge (Paris: FR0000120537 - news) concern

By Atul Prakash

LONDON, March 16 (Reuters) - Britain's top share index rose on Monday, recovering from its biggest weekly drop of 2015, with mining stocks leading the market higher on expectations of steady economic growth in China, the world's biggest metals consumer.

The UK mining index rose 0.6 percent after Chinese Premier Li Keqiang said on Sunday the country had a lot of room to manoeuvre its policy and boost the economy.

"We believe that market optimism on the mining sector is at a pretty low level on concerns regarding supply side issues and the sustainability of Chinese growth. And that makes the sector sensitive to any good news coming through," said Robert Parkes, equity strategist at HSBC Global Research.

"We are overweight on the mining sector and believe that the pessimism is overdone especially in the current environment where the business cycle indicators are starting to point upwards. It's a cyclical sector and is exposed to a re-acceleration in the global economy."

The blue-chip FTSE 100 index was up 0.4 percent at 6,768.51 points by 1208 GMT, after dropping 2.5 percent last week in its biggest weekly decline since December, touching its lowest level in nearly two months. Monday's rise left the index about 3 percent off an all-time high it reached in early March.

Mining companies were the biggest gainers in the FTSE 100, with Rio Tinto (Xetra: 855018 - news) , BHP Billiton (NYSE: BBL - news) , and Randgold Resources rising 0.8 to 1.6 percent.

"China is one of the biggest markets for gold and other commodities globally and price changes are often closely related to Chinese issues. Signs of economic recovery in China will no doubt be having a buoyant effect on raw materials," said Augustin Eden, an analyst at Accendo Markets.

Irish construction company CRH -- which has agreed to buy assets from Lafarge and Holcim -- fell 3.3 percent after Holcim called a halt to its merger with Lafarge, pressing the French company to renegotiate the deal terms. (Additional reporting by Alistair Smout; Editing by Larry King)