"Even with the copper price recently reaching an all-time high, for example, the incentive price to build greenfield (and some brownfield) projects is still above the current price in some cases as longer lead times greatly impact project returns," said Jefferies.

Copper is trading at around US$4.50/lb, up from about $3.50/lb at the start of the year. Prices have not been at such elevated levels for a decade.

The bank pointed to the risk of changes to mining taxes and royalties in Chile and Peru - two key copper-producing countries - as worrying developments that could trigger similar announcements elsewhere in the world.

"While the risk of higher taxes and royalties in Chile and Peru is a major focus in the markets at the moment, these issues are likely to become relevant in other resource-rich regions as well," Jefferies said.

"Periods of high commodity prices tend to stir up thoughts of resource nationalism in poor countries, and windfall profit taxes should be expected."

The bank said miners were "likely to continue to prioritise capital returns and balance sheet strength over investment in long lead time, capital intensive growth projects as the economics of these projects are moving targets that are in many ways beyond the control of the mining companies themselves".

This lack of investment would underpin a "stronger for longer" price environment, the bank said.

"We do not believe this point is fully appreciated in the equity markets, and we are virtually certain it is not well understood by the policymakers themselves," said Jefferies.