This paper presents the results of Discrete Element Modelling (DEM) which quantitively examine the effect of coal fouling on the deformation and degradation of ballast upon cyclic loading. The degradation model described herein considers the Weibull distribution effects in tandem with a granular medium hardening law that incorporates the maximum contact criterion to capture surface abrasion and corner breakage of angular ballast. The DEM model had been calibrated initially with laboratory data obtained from large-scale direct shear testing. Subsequently, a series of cubical shear test simulations have been carried out using DEM to understand the behaviour of fouled ballast whereby the numerical particle degradation modelling could simulate the experimental response of the ballast assembly at various fouling levels. The results show that the increased level of fouling exacerbates the sleeper settlement, while decreasing the resilient modulus and the particle breakage. Ballast beneath the sleeper experiences significant breakage compared to the crib ballast, and not surprisingly, the extent of damage decreases with depth. Rigorous microscopic analysis is also presented in relation to inter-particle contacts, particle velocity and anisotropy of the ballast assembly. This micromechanical examination highlights that the decrease in ballast breakage for fouled assemblies is predominantly attributed to the inevitable decrease in inter-particle contact pressures as effected by the coating of ballast aggregates by the coal fines.