Remember those dismal economics classes at school? A rise in demand for a good lifts its price, but then the supply curve shifts, bringing prices back into line. The mining industry has experienced a demand shock, and prices, in nominal terms at least, are through the roof. But has there been, as students might expect, a supply-side response? Sector-wide capital expenditure has jumped since 2002, which roughly marks the beginning of this latest boom. Data from CRU show that aggregate annual mining capex has increased 133 per cent in constant dollars. Over the same period, investment relative to depreciation and the depletion of reserves, has increased from 1.3 times to more than two times last year. On that basis, miners have not tried as hard to build capacity since 1989. Next year, the industry’s capex will probably exceed $70bn.

But, on other measures, miners have been dragging their heels. Half of the absolute rise in spending since 2002 occurred last year. And capex as a percentage of net tangible fixed assets – while 3 percentage points higher than it was five years ago – is still only in line with the decade average of 14 per cent (nor has it risen in the last three years). Apart from last year, capex relative to overall industry sales has actually been below the long-term average since 1998.

So miners stand accused of underinvesting. One defence is that the industry is now throwing its cash around, but the evidence is mixed. It is true that miners cannot always invest where they want to but they have also shown little appetite for greenfield projects – it is far easier to exploit existing assets. The sector does not exactly suffer when a lack of investment is lifting long-term prices. Besides, with mine lives measured in decades, why would executives blow short-term profits on a project that benefits their successor’s successor?