Graphite conducts electricity, due to delocalization of the pi bond electrons above and below the planes of the carbon atoms. These electrons are free to move, so are able to conduct electricity. However, the electricity is only conducted along the plane of the layers. In diamond, all four outer electrons of each carbon atom are 'localized' between the atoms in covalent bonding. The movement of electrons is restricted and diamond does not conduct an electric current. In graphite, each carbon atom uses only 3 of its 4 outer energy level electrons in covalently bonding to three other carbon atoms in a plane. Each carbon atom contributes one electron to a delocalized system of electrons that is also a part of the chemical bonding. The delocalized electrons are free to move throughout the plane. For this reason, graphite conducts electricity along the planes of carbon atoms, but does not conduct electricity in a direction at right angles to the plane.