(Changes cargo to liquid fertilizer from nitrogen, adds details of trains)

CHICAGO, Dec 17 (Reuters) - Two freight trains collided in southeastern Minnesota on Wednesday, derailing about 40 cars, spilling liquid fertilizer and sending one locomotive into the Mississippi River, authorities said.

No one was injured but two employees of the Canadian Pacific Railway Ltd <CP.TO>, operator of both trains, were taken to the hospital for examination, CP Rail spokesman Mike LoVecchio said.

The accident involved one train with 15 rail cars, and another with 93 rail cars, three of which contained fertilizer, he said. The rest were empty.

A 1,000-gallon (3,785-litre) stationary tank of propane used to warm the tracks was also punctured and had a small leak, said Joyce Tlougan of the Winona County Emergency Management Department.

A nearby veterans home was evacuated "as a precautionary measure due to a shift in the wind," Tlougan said. "This is the only evacuation at this time."

The trains collided near Dresbach, Minnesota, around 5:30 a.m. CST (1130 GMT) in an area where two tracks run parallel on an embankment above the river. The area is about 100 miles (160 km) southeast of Minneapolis.

The cause of the accident is not known, LoVecchio said.

Initial media reports said one train was carrying liquid ammonia, a toxic material. Emergency workers later said the train was carrying liquid nitrogen, a nonhazardous coolant, but later confirmed that it was fertilizer.

The locomotive in the Mississippi River was not leaking diesel fuel and none of the rail cars were in the river, as indicated by early reports. (Additional reporting by Lisa Shumaker, Editing by Eric Walsh)

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