China’s fascination with resource-rich Africa’s treasure knows no bounds. If the metal is red, so much the better: China is the world’s biggest consumer of copper. Last week Discovery Metals, whose main asset is a copper mine in Botswana, brushed off a US$850m offer from private equity group Cathay Fortune. The Australian exploration company wisely left the door open for a higher offer. It must recall the generosity of Minmetals Resources, which paid C$1.3bn in February for Toronto-listed Anvil Mining, a miner in Democratic Republic of Congo.

Copper has recovered from its midyear funk to trade around $8,100 a tonne. One reason for this resilience when demand is subdued is that liquid stocks of the metal hit a historic low (put at 2.6 weeks of consumption, by IntierraRMG) in the third quarter. But copper’s price is not just a bet on Chinese demand – or monetary easing programmes.

Supply – constrained by weather, earthquakes, permits and declining grades from old mines – also plays a part. The spat between Anglo Americanand Codelcodid not affect supply but labour disruption in Chile did. The world’s top 10 mines produced 600,000t fewer of copper last year than in 2010, Rio Tinto notes. It expects mine closures to cut copper output by 1.8mt in the next five years and declining grades by a further 1.6mt. In other words 3.4mt of new production, equivalent to a fifth of this year’s output, will be required to stand still.