In the last two decades, metal matrix composites (MMCs) have been utilised in various industrial applications owing to their high strength-to-weight ratio and superior wear resistance. However, these superior mechanical properties bring poor machinability. The purpose of this paper is to perform a simulation study on the cutting mechanism of magnesium based MMCs reinforced with SiC nanoparticles. A two-dimensional micromechanical finite element (FE) model is established using ABAQUS/Explicit to simulate the micro machining process with consideration of cutting edge radius. The simulated results present tool-particles interaction, chip formation process, cutting force, Von Mises stress and strain distribution within workpiece under the effect of uncut chip thickness. The model is validated by comparing with experimental data in terms of cutting force and chip morphology.