The performance of alumina‐ and magnesia‐based carbon‐containing refractory castables, suitable for different sectors of steel plants, has been compared. Natural flaky graphites have been modified by their surface treatment via sol‐gel route. The sustainability of graphite in oxidizing atmosphere was noticeably increased by this method with a synergistic possibility of pollution abatement. The hydrophilic nanocoatings of ceramic oxides derived by inorganic precursors reduced the water demand of the composite batch and simultaneously enhanced its oxidation resistance. The oxide coating compositions together with the precursor chemistry have been varied to substantiate their common beneficial features. Scanning electron microscopy (SEM), Raman spectroscopy, Differential thermal analysis (DTA), Thermogravimetry (TG), X‐ray diffraction, thermal conductivity, and zeta‐potential studies have been carried out to compare the influence of heat treatment on as‐received and surface‐modified graphites. The properties of refractory castables, namely, bulk density, apparent porosity, and cold crushing strength have been measured within wide temperature region (110–1500°C), to confirm the positive influence of nanoengineering on graphite surface. The sequence of important phase reactions during sintering of both the composite materials has been discussed. Finally the slag resistance behavior at aggressively fired condition has been investigated to corroborate the improved matrix characteristics due to coated graphites.