Aluminium alloys containing small additions of scandium exhibit unique operating properties. Alloying material with scandium significantly improves product weldability, reduces the tendency towards hot cracks and improves welded joint mechanical properties. The aim of this work is to increase the scandium extraction into a master alloy by preliminary transformation of scandium oxide into fluoride and introduction into the composition of an aluminium powder alloying additive. Results are provided of laboratory experiments for preparation of aluminium-scandium master alloy by aluminothermic reduction of scandium fluoride using sodium fluoride and aluminium powder within the alloy composition. Scandium fluoride is prepared by treating scandium oxide with 40% hydrofluoric acid. The overall extraction of scandium from oxide into fluoride and from fluoride to the aluminium-scandium master alloy is 88.5% with an average scandium concentration in the master alloy of 1.90 wt.%. The microstructure of the master alloy obtained is represented by scandium aluminide Al.sub.3Sc crystals with a size from 10 to 25 mum uniformly distributed within the master alloy. An additional reserve for increasing the extraction of scandium into the master alloy and reducing its cost is processing of slags formed in the preparation of the ligature. The use of an aluminium powder with high specific surface area in the composition of the alloying additive increases scandium extraction into the master alloy due to better contact of the reacting phases. The resultant Al-Sc master alloy has uniform distribution of Al.sub.3Sc particles within the volume of the metal.