both, lead is made of graphite.
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The lead in pencils are not made out of lead, as is common belief. Pencil lead is made out of graphite.
the lead in a lead pencil is made from clay and graphite
first step in pencil manufacture involves making the graphite core as the "lead". Back in the day we used lead which is toxic, the we switched to Graphite which is non-toxic. --------- It is frequently called "lead" as in "lead" pencils. But there is no lead in Graphite. Pencils simply contain a mixture of graphite and fine clay in varying proportions to make them hard or soft.
The lead inside the pencil is made from Graphite which is a natural form of carbon. The heavy metal Lead has never been used in pencils since its invention. If lead have been used instead of graphite the users of pencils may not be alive because lead and its compounds are very toxic.
Graphite is in pencils, and Graphite is made up of Carbon Atoms, the same as Diamond, the only difference is its structure, Diamond has 4 covalent Carbon Bonds, whereas, graphite as 3, and a spare delocalised electron, meaning, graphite forms layers and can be used as a lubricant.