Offhand, I don't know, but there are cases when you have to refresh or open another page before changes are apparent. The changes are made, but they just don't show on the screen. Of course, no matter what, next time you logged in, you would see that your mine was level 3.
When you start building something, click the Buildings button under Navigation to make sure the resources to build were subtracted. Then you might notice the countdown going down. When it arrives at zero, the cancel link is replaced with a ==> link. I don't know why, but clicking that link doesn't always refresh the page for me. Instead, click on the Buildings button again, and you should see your mine at the new level.