"It made a real mess.
"There was a lot of coal everywhere.
"If the carriage derailed on the Balclutha side it could have damaged the closest car.
"It was just lucky it was on the other side of the road."
Part of a train track switching device was bent high in the air after the derailment, he said.
Late last night emergency services and KiwiRail staff were still working to clear the track.
A lane which had been blocked, but did not disrupt traffic flow, had been cleared, the police spokeswoman said.
No cars were involved in the incident, and no-one was hurt, she said.
A New Zealand Fire Service spokesman said appliances from Balclutha and Clinton attended the incident.