'Lucky' Australians dodge cyclone's worst

Tropical cyclone Rusty crossed Australia's northwest coast on Wednesday evening as a mid-strength category three storm -- short of the category four than had been expected and well below a top-level category five.

The massive, slow-moving storm also took a last-minute turn to come onshore further east of the major iron ore mining centre Port Hedland than forecast, pummeling the isolated outpost of Pardoo but sparing most residents the worst.

"We were expecting the worst, we were expecting to get smashed," South Hedland police senior sergeant Ron Patchett told ABC radio.

"As a result we're all feeling a bit lucky."

Emergency workers said there had been a few reports of "minor damage" in cyclone-prone Port Hedland, about 1,300 kilometres (800 miles) north of Perth, but nothing serious.

Even in Pardoo, which bore the brunt of the wild weather, destruction was less than feared. The town is home to a single roadhouse service station and a cattle farm.

"Water and wind has got in through some weatherboards and it's popped tiles off in the toilets. There are a lot of trees and limbs and stuff around," said Pardoo Roadhouse manager Ian Badger.

By early Thursday Rusty had weakened to a category two storm and was slowly tracking inland over the outback town of Marble Bar, with red alerts lifted for coastal communities, allowing hundreds of evacuees to return home.

The weather bureau said flooding was now the major concern in the resources-rich Pilbara region, with some 400mm (16 inches) of rain expected.

Gusts of up to 130 kilometres (80 miles) per hour were expected to die out by Thursday evening, when Rusty would weaken below cyclone intensity.

Global iron ore giants including BHP Billiton, Rio Tinto and Fortescue Metals Group have all shut down or scaled back operations due to the storm, and are expected to resume full works next week.