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A decision on whether to develop the second phase of Oman's Sohar aluminum smelter is expected in the third quarter 2011, the country's minister for commerce and industry said Thursday.

Maqbool Ali Sultan told Dow Jones Newswires the development of phase two has been delayed due to limited natural gas supplies.

"Phase two is very important for all Sohar shareholders and Oman as well," he said. "The main problem for phase two is the gas. We're working on the gas availability and when we have the gas, then phase two of the smelter will go ahead.

"We will hear about the gas sometime in the second half of 2011, I think in the third quarter," he said.

Sohar Aluminum, owner of the smelter, plans to double its production capacity to 720,000 metric tons a year from its current 360,000 tons a year. Sohar Aluminum spent $2.4 billion to build the first phase of the smelter.

Sohar Aluminum is 20% owned by Rio Tinto Alcan, a unit of Anglo-Australian mining titan Rio Tinto PLC (RIO), 40% by Oman Oil and 40% by Abu Dhabi Water and Electricity Authority.

-By Angus MacDonald, Dow Jones Newswires; 44 20 7842 9328; angus.macdonald@dowjones.com

(Alex MacDonald in London contributed to this story)