How to Machine Graphite ??

First, synthetic graphite should be machined dry without the use of liquid coolants.  The use of coolants when working with graphite will produce an abrasive slurry when the coolant combines with the fine bits of graphite chips and dust.  The coolant fluid will also permeate the graphite material through the open porosity of the material. Essentially the graphite will act as a sponge, as capillary action draws the coolant into the open pores.  This contamination will cause problems when the graphite is used in an application that requires the inert nature of the graphite material.

Second, the starting raw graphite material should be dry before machining.  If your raw material stock has been stored outside or been exposed to water it should be baked to drive out any excessive moisture.  The water and dust will make an abrasive slurry, which will dramatically reduce your tool life.  This issue can be most clearly observed when cutting wet graphite on a band-saw.  The dust does not exit the material during cut and packs up in the kerf.  Essentially the cutting tool re-cuts the same graphite chips over and over again.            

Thirdly, it is very important to have an adequate ventilation system to contain and vent the graphite dust and chips produced during the machining operations.  Graphite dust is electrically conductive and will find its way into every crack or opening in a machine enclosure.  Static electricity will draw the dust to circuit boards and create short circuits when the build up bridges contacts.  Machining graphite on a CNC machine that has not been specifically modified to handle the graphite dust can lead to expensive damage and potentially void a warranty.

Fourth, graphite machining should be done with very sharp tooling to prevent particle pull-out or edge chipping.  Once a cutting tool has lost its sharp edge it will fracture the graphite material or cause a blowout of an edge when exiting a cut. This is because the dull tool is pushing and not cutting the material.  Graphite has great compressive strength, but will fracture if the force is directed out of the material rather than into it.  Tooling made from micro-grain carbide designed for cast iron works well in graphite. Vapor deposition diamond coated endmills also work well, but can be very expensive. 

Fifth, it is a good practice when milling graphite to ''Climb Mill'' or work from the outside into the material.  When milling pockets avoid leaving islands when the endmill cuts from the pocket perimeter into the center of a pocket.  The island material will break out when the final island is removed resulting in a pockmarked cavity.  It is a better practice to drill a center hole and mill the pocket from inside to the outer edge.