UPDATE 1-Botswana mine accident hits production at Gem Diamonds
* Expects production to get delayed until H1 of 2014
* Adverse ground conditions and accident to cause delay
June 18 (Reuters) - Gem Diamonds said initial production at a mine in Botswana would be delayed until the first half of 2014 following an accident that killed two employees.
Production at the Ghangoo mine was scheduled to start in 2013 at an initial rate of 100,000 carats per year, rising to a peak steady state production of 780,000 carats per year, according to the company's website.
Two contractors died when the ground collapsed at the face of a tunnel at the mine, the company said in a statement.
Gem Diamonds, which focuses on large, high-quality diamonds, said a full assessment of the accident's impact on the project timeline and overall costs is ongoing.
The company said it had spent about $31 million of the $85 million budgeted on the Ghangoo project.
Shares in Gem Diamonds were down about 4 percent at 201.3 pence at 0715 GMT on Monday on the London Stock Exchange.
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