Good question. We had to find a sharp scientist to figure this one out. Pierre Kerr gives you this answer.
Hmmmm. I'll have to get the lead out to give you a good answer. If you look at the science corner in your library you will see a pencil cut in half. It's on the board that has the video tape. I did that so that you could see what's inside of a pencil. The black stuff inside is sometimes called the lead, but it's not really made of lead. It's made of graphite and clay. Graphite is a kind of coal.
To find out exactly how a pencil is made I consulted with the Compton's Encyclopedia. This is what I found.
"To make a modern pencil lead, powdered graphite from Sri Lanka, Madagascar, and Mexico is mixed with water and thoroughly blended with clay from Germany. The mixture is extruded at a pressure of 400,000 pounds (181,600 kilograms) to make spaghettilike strands that are air-dried and baked at about 2,000° F (1,100° C). After the leads have cooled, they are immersed in molten wax, a treatment that makes the lead write more smoothly.
"Most of the wood used for pencil casings comes from the California incense cedar tree. This type of cedar is free of knots, soft enough to sharpen, and strong enough to resist breakage. Tree logs are dried then cut into small, pencil-length slats measuring about 7 inches (18 centimeters) long and 1/4 inch (0.6 centimeter) thick. These slats are kiln-dried, stained with a reddish dye, and impregnated with wax.
"At the pencil factory, machines plane the slats smooth then cut grooves in each slat in parallel rows. Each groove is precisely half the depth of a pencil lead. The leads are placed in the grooves, and an adhesive (glue) is applied to the slat. A second slat is clamped over the first to make a block.
"After the adhesive has dried, the blocks are cut into individual pencils. Each pencil must be shaped and sanded. Most pencils used for writing on paper are round or six-sided; others may be triangular, flat, or tapered. The pencils are painted, labeled, then coated with three to 12 layers of lacquer. In the final step the ends of the pencil are squared. If the pencil is to have an eraser, one end is fitted with a small brass cup called a ferrule that holds the rubber and pumice eraser. The pencils are put into boxes, ready for shipment.
So, a pencil is actually a sandwhich of two pieces of wood and a piece of graphite.
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