The practical application of recycled and marginal materials such as scrap tyres and mining by-products in railways is becoming more prevalent. This paper investigates the fundamental stress-strain behaviour of a granular waste matrix (steel furnace slags blended with coal wash and recycled rubber granules) to serve as the railway subballast. The findings indicate that the incorporation of rubber has a substantial impact on the geotechnical properties of the waste mixtures, especially the dilatancy response and the ability to attain the critical state. For the mixtures with a higher amount of rubber (20–40%) that could not achieve the critical state, extrapolation was adopted to obtain the critical state parameters. A critical state surface was developed by capturing the effect of rubber inclusions. Moreover, a semi-empirical model was established to predict the dilatancy response of the waste composites by modifying the critical state parameters and incorporating the energy input.