Emergency services declared a major incident following a train fire in Llangennech, Carmarthenshire.
The fire was reported just before 11.20pm on Wednesday, August 26, when a number of carriages carrying diesel on the freight train caught alight.
The two workers who were on board the train have no injuries, British Transport Police (BTP) said.
Flames from the fire could be seen for miles and homes within 800m were evacuated but have since been allowed to return.
Gary Jones, a councillor for Llangennech, said the fire "seemed to die down and then there seemed to be fresh explosions".
"The height of it was incredible," he said.
Local County Councillor, Gwyneth Thomas, a former A&E staff nurse, was at the scene overnight to offer help if necessary.
"Due to the possibility of an explosion, many local residents had to leave their homes,” she said.
"I was hugely impressed by how calm they were. Some carried young children and others took their dogs with them. About 50 were escorted to the local community centre and another 15 or so to Ysgol y Bryn school.
"By about 4.30 this morning they were allowed to return home after the fire was brought under control.
"It’s very fortunate that the accident didn't happen closer to Llangennech station where there are more homes, and evacuation of residents would have been more difficult."
Ysgol Llangennech was opened up as a ‘Gold Command’ centre for the emergency service teams.
Cllr Thomas added: “I can’t speak too highly of the rapid and efficient way in which the emergency services dealt with such a critical situation.
"The co-ordination in bringing a potentially very dangerous fire under control and ensuring residents’ safety was superb.”
She also praised Carmarthenshire’s Chief Executive officer, Wendy Walters, the two headmasters and other council staff for opening the schools and community centre at such short notice.
“We’ve not yet heard what caused the derailment, but obviously there’ll be a major investigation,” said Cllr Thomas.
Emergency services remain at the scene.
Dyfed-Powys Police Superintendent Ross Evans said: “This was a fast-moving situation, which was declared a major incident due to the initial risk of harm to people living in the area.
“The policing response was large scale, with officers across the force retained on duty to ensure we had sufficient resources to carry out the evacuation swiftly, as well as the deployment of a logistics specialist to assist and advise our officers on safely moving people from their homes to the reception points.
“The evacuation no doubt caused a significant amount of disruption for those evacuated in the middle of the night, and I would like to personally thank residents for their response, as well as our frontline officers who swiftly moved hundreds of residents out of their homes.
“My thanks also go to our emergency services colleagues for their response, and partners at the local authority for their assistance in finding and opening Bryn School and Llangennech Community Centre as safe points.
“Officers will continue to be visible in Llangennech, and we will continue to work closely with our colleagues at British Transport Police, Mid and West Wales Fire and Rescue Service, Carmarthenshire Council, and Natural Resources Wales to bring the incident to a conclusion.”
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