Abstract: A method for making a rare earth metal salt of an organic acid, for example neodymium naphthenate, is provided. The method includes the steps of producing a three-phase system which comprises an aqueous phase in which is dissolved a salt of a rare earth metal or an alkali metal or alkaline earth metal salt, a solid water-insoluble rare earth compound suspended in the aqueous phase, and an organic phase containing the organic acid. The organic acid is allowed to distribute between the organic and aqueous phases, react with the dissolved inorganic salt and release an inorganic acid. This leads to some of the water-insoluble rare earth compound becoming dissolved in the aqueous phase and reacting with the organic acid to form a rare earth metal salt of the organic acid. The rare earth metal salt of the organic acid is allowed to transfer to the organic phase from whence it is recovered.