As residents in Western Australia's Pilbara region assess the damage caused by Tropical Cyclone Lua overnight, Queensland's Gulf communities are being warned to prepare for a cyclone heading their way.

Pilbara residents emerged from a night of wild weather this morning after a cyclone crossed the coast north of Port Hedland as a category four system yesterday afternoon, before later weakening to category two strength.

There are reports of extensive damage at the small community of Pardoo, while Nullagine, Newman and Marble Bar were also in the firing line overnight.

Cyclone Lua
© BOM AustraliaCyclone Lua forecast map
It has now been downgraded to a category one system as it slowly moves inland towards the West Australian Goldfields.

Recovery teams travelled to the remote Pilbara towns this morning to assess the damage.

"We've only got scant reports of damage at this stage," Fire and Emergency Service manager Lez Hayter said.

"We did have a call from Pardoo Roadhouse. They've taken another hammering which they seem to cop all the time - some fairly major structural damage. But luckily the people are in good spirits and they're safe."

A red alert is still in place for inland parts of the east Pilbara, including Nullagine, Newman, Jigalong, Woodie Woodie, Nifty and Moly Mines, with Lua now continuing inland towards Wiluna.

Cyclone Lua 2
© BOM AustraliaSatellite image of Australia on Saturday, 17 March 2012
Those on red alert are effectively in lockdown and are being advised to remain in shelter or go to shelter immediately.

Meanwhile, Queensland's gulf communities are being warned to prepare for a tropical cyclone as a low pressure system over Karumba develops.

The system is expected to move offshore today and develop into a category one system overnight.

The cyclone, which will be named Mitchell, is expected to produce heavy rain, flash flooding, gales and unusually high tides.

Rick Threlfall from the weather bureau says the system will linger and affect much of the state this week.

Rainbands from an active monsoonal trough have already produced heavy falls on the north-east coast.

Police have closed the Bruce Highway at Giru, south of Townsville, where water is rising.