This paper presents the development of a FE-simulation model to predict the mechanical stresses and thermal loads that a cutting tool of polycrystalline cubic boron nitride (pcBN) is subjected to, when machining AISI 316L. The serrated chip formation of AISI 316L has a major impact on the periodic loads acting on the cutting tool. Therefore, it is vital to correctly model this serrated chip formation. One of the major difficulties with FE-simulations of metal cutting is that the extreme deformations in the workpiece material, often leads to a highly distorted mesh. This paper uses the Coupled Eulerian-Lagrangian (CEL) formulation in Abaqus/Explicit, where the workpiece is modelled with the Eulerian formulation and the cutting tool by the Lagrangian one. This CEL formulation enables to completely avoid mesh distortion. To capture the chip serration process, the workpiece material is described with the Johnson-Cook damage model. The FE-simulation results are validated via comparison of the modelled cutting forces, chip serration frequency, and contact length against experimental ones.