Shares of Australian company Allkem (ASX:AKE) are down as much as 5% to A$11.41 and are on track for their worst day since September 21.

The company, which mines lithium, has announced rising capital costs for its projects, including the James Bay project in Canada.

The capital cost estimates for James Bay has been raised to $381.5 million, marking a 33.8% increase from the estimates provided in December 2021.

Allkem (ASX:AKE) has also raised its cost estimate for the Cauchari lithium brine project in Argentina to $659 million, up from $446 million.

In addition, the operating costs per tonne of lithium carbonate equivalent were noted to have increased from $3,560 to $4,081.

The company, which is currently in the process of merger with the U.S.

lithium behemoth Livent, claims these increases align with the current uptrend in inflationary pressures.

Despite the current fall, Allkem’s stock has risen 6.9% this year, as of last recorded close.

Allkem (ASX:AKE) is an Australian lithium mining company with substantial projects in Canada and Argentina.