Neodymium is produced commercially by the fused salt electrolysis of Nd2O3-NdF3-CaF2-LiF melt. The efficiency of the process is low due to the limited solubility of Nd2O3 in the fluoride melt. The suitability of making Nd directly from Nd2O3 by the FFC Cambridge process seems very attractive. The basic requirements for FFC Cambridge process are that (a) the oxide should not dissolve in the molten salt (usually CaCl2 or CaF2-LiF) and (b) the decomposition potential of oxide should be below the decomposition potential of salt. The present study was to understand the first requirement. It reports for the first time the in situ chemical interactions of Nd2O3 with molten CaCl2 and CaF2-LiF using confocal scanning laser microscope. In molten CaCl2, Nd2O3 reacts vigorously to form NdOCl. The product detaches from the parent Nd2O3 surface, exposing the oxide surface to further attack from molten CaCl2. The reaction rate becomes faster as the temperature increases. In a molten CaF2-LiF melt, Nd2O3 dissolves. Owing to the limited solubility of the oxide in CaF2-LiF melt, the direct electroreduction may still proceed in an oxide-saturated CaF2-LiF melt.