A statement by the Board of Investment, quoted Chris Cowan director of Plumbago Lanka as saying that the firm will work with Sri Lanka's Geological Survey and Mines Bureau in operating the firm.
The BOI approves foreign and local investments and gives tax holidays.
The agency said the firm will add value to graphite.
"[F]rom its inception, has sought to promote projects where value addition has been applied to local natural resources," the BOI said in a statement.
"Hence the export of value added graphite will be beneficial to Sri Lanka’s economy."Sri Lanka is a source of high quality vein graphite.
In October the BOI said it had approved Sarcon Development (Pvt) Ltd, whose main investor is Caribbean based firm, to set up a 15.2 million US dollar facility to process and export graphite.