Catalysis of the reaction: mugineate + 2-oxoglutarate + O2 = 3-epihydroxymugineate + CO2 + H+ + succinate. Also converts 2'-deoxymugineate to 3-epihydroxy-2'-deoxymugineate.
mugineic acid,2-oxoglutarate:oxygen oxidoreductase (3-hydroxylating) activity