Rio Tinto cuts output further at Australian aluminium smelter

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* Smelter power prices have doubled since 2014

* Aluminium prices up but oversupply persists

MELBOURNE/LONDON, March 3 (Reuters) - Rio Tinto (Hanover: CRA1.HA - news) and its partners are cutting output and jobs at the Boyne aluminium smelter in Australia, adding to cuts announced in January, it said on Friday, blaming a jump in power prices.

Rio said output would be cut by 14 percent and that "a significant number of jobs lost".

"Boyne Smelters has been working hard to secure a competitive energy deal. Both parties have been negotiating in good faith but ultimately could not reach agreement," Rio Tinto said in an emailed statement.

The latest production cut follows plans in January to cut output this year by about eight percent, or 45,000 tonnes, because of rising costs of power, 85 percent of which is provided by Gladstone Power Station.

Boyne said in January power prices had doubled since October 2014 and it could not secure an internationally competitive price for the 15 percent of power it needed to supplement its long-term contract.

Boyne is majority-owned and operated by Rio Tinto and co-owned by Japan's YKK Aluminium, UACJ Corp, Mitsubishi Corp (LSE: 7035.L - news) , Marubeni Corp, Sumitomo Corp and Sumitomo Chemical.

Electricity is a major cost for aluminium smelters who have struggled with poor margins. Aluminium prices have risen this year but oversupply remains an issue.

Rio sold its aluminium business in Britain last year, while Russia has put forward the idea of an OPEC-like body to boost aluminium prices. (Reporting by Sonali Paul in Melbourne and Barbara Lewis in London; editing by Jason Neely)