Step 1: Easy as 1,2,3
1) lead pencils (any hardness, any maker), best if free, like gift pencils, old small pencils.
2) fire source and fire fuel (bic lighter pictured, best add old newspaper, twigs, etc)
3) mechanical pencils (mine pictured. buy your favorite at your office supply store.)
4) knife or any other cutting tool (not pictured)
5) place to keep finished leads (I made a 3/4" x ~6" plastic tube, inserting a piece of dowel in each side)
6) place to make a small fire (may be a soup can or the like -- not pictured)
Ok, this is my first instructable, let's KISS (ops, not you and me), but KEEP IT SIMPLE STUPID.
1) get old pencils and fire fuel, put everything together where you can make a fire
2) set it on fire and wait until the pencils are nothing more than lead and charcoal. Add fire fuel if necessary (pencils burn quite well)
3) wait things cool and scrape chacoal from burnt pencils with the knife
4) load your 2.0mm leadholder or save the leads for future.
Well, as you know, pencils get shorter as you sharpen them and a lot of good lead goes to the trash everyday. Why not use them until very small? With my leadholders, I can use the lead up to about 10mm long, as pictured. Also, I have a heavy hand, so I start to get comfortable writing with the 0.9mm pencil. So why not go big?
I have 4 2.0mm leadholders. 2 are made by Koh-I-Noor (www.koh-i-noor.cz/en), 1 from German Staedtler and one Brazilian Compactor. I like the all-metal Koh-I-Noor's best.
Hope it was useful.