By Noel Randewich

JUAN DE GRIJALVA, Nov 6 (Reuters) - Mexican soldiers were hard at work digging for survivors on Tuesday after a huge mudslide that buried a village when torrential rains caused a soaked hillside to collapse.

Sixteen people were missing in Juan de Grijalva, hit by a wall of water and mud on Sunday night when tonnes of earth and rock tumbled into a river.

The army flew rescue teams to the remote village, in the mountains of Chiapas state, by helicopter.

"What the soldiers are working on is digging into the hill," said civil protection official Sergio Chacon. Scuba divers were searching the Grijalva River for survivors or bodies, he said.

The rains that triggered the mudslide had already flooded Tabasco state down river, forcing some 800,000 people from their homes in one of Mexico's biggest natural disasters of recent years.

Much of Tabasco was still under water after the floods last week. Gov. Andres Granier put the economic cost of the disaster at 50 billion pesos ($4.7 billion).

Despite the destruction and dramatic images of houses flooded up to roof levels over huge areas, only three people have been reported dead in Tabasco, an oil-producing state.

The federal government was due to begin pumping water from state capital Villahermosa, home to half a million people, on Tuesday but most residents are unlikely to return for up to three months.

President Felipe Calderon canceled a planned trip to an Ibero-American summit starting in Chile on Thursday to visit Chiapas.

Many of the areas worst hit by the flooding have been turned from woodland into farmland in recent decades, removing forests that could have reduced the effects of the flooding.

"It's not a coincidence that the consequences have been most serious in regions where deforestation has been heaviest, like Chiapas," said Hector Magallon of the environmental group Greenpeace.

Mexico's coffee crop in the main growing state of Chiapas has not been damaged by torrential rains over the last few days, leaders of two growers' groups said on Tuesday.

(Writing by Alistair Bell, editing by Eric Walsh)

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