It's present everywhere - from the lead in your pencil to nuclear reactors. Let's have a look at how graphite has become important to the human economy.
A few years before 1565, the people from a tiny village in northern England discovered that a nearby hill called Grey Knotts had strange, black rocks. They thought these were rocks of lead. If a sheep rubbed on it, it got black marks. The villagers soon began to saw off sticks off this rock, which they could use to mark their sheep. These were the first pencils!
This soft rock is graphite. But it is so soft, that the sticks can break easily. To prevent breaking, they needed to be put in holders. (As you'll have realised when you sharpen a pencil too much!) Over time, this evolved into the pencil as we know it - a thin stick of graphite in a wooden case.
Graphite can also withstand very high heat. The government of England soon realised that it could be used to make moulds for making cannonballs. Two hemispherical cups are cut out of graphite and joined, into which molten iron can be poured. Because graphite became so precious, the king seized the Grey Knotts mine and banned the locals from using it.
Today, graphite is used to make crucibles in which iron is melted, and poured into shapes for industrial use.
In 1795, Napoleonic France was at war with practically everybody and couldn't import graphite sticks. Nicholas Conté discovered that if you mixed clay with powdered graphite (which France had) and baked it, you could get a useful pencil. Change the proportion of clay to graphite, and you get pencils of differing hardness. That's how we get modern HB pencils!
In a nuclear reactor, neutrons are fired at Uranium-235 atoms. When the neutron hits the atom, it splits. That releases energy, which can be converted to electricity. But the speed of the neutrons must be controlled, so that they will hit the atoms and not just buzz by. For this a neutron moderator is used, made of pure graphite. If the graphite is impure, it will absorb the neutrons rather than slow them down.
Nuclear energy has made graphite even more valuable than ever before.
Graphene is a special form of graphite. It exists in sheets, one atom thick. Its extreme natural thinness has made it very useful for many reasons. It can be used as a gas detector, because of its huge surface area. As soon as a gas molecule hits a grapheme sheet, it can set off a tiny current.
Graphene oxide can kill bacteria. Thus sheets of this material can be used in bandages and as anti-septic packing material.
But the most promising use is in nanotechnology. Since it is very thin and can conduct electricity, it can be used to make tiny electrical circuits. These in turn can be used to make tiny gadgets like pacemakers for the heart, DNA sequencers etc.
Andre Geim and Konstantin Novoselov received the Nobel Prize in Physics for 2010 for their study of graphene.