Adds meeting with Macron, push for European sovereignty in paragraphs 4-6

PARIS, May 18 (Reuters) - G7 countries have options to reduce their dependency on rare earths, but have no time to lose, German finance minister Lars Klingbeil said during a summit in Paris on Monday.

G7 governments are trying to coordinate efforts to reduce their reliance for critical minerals and rare earths on China, which dominates supply chains vital for technologies such as electric vehicles, renewable energy and defence systems.

"We should not fall into a tone of complaint ... Instead, we have to work on our strength," Klingbeil told reporters.

Klinbeil, who is also Germany's vice chancellor, said he met French President Emmanuel Macron for a one-hour private meeting in which they discussed how to strengthen Europe's sovereignty.

"We agree that the Franco-German axis is important to move Europe forward, especially in these times," he said, adding that projects would need to be brought forward before the next election.

Ministers from six leading European economies including Germany and France vowed to be the drivers of progress in the region in January as they tackled how to advance projects stalled by the EU's complex decision-making process.

Klingbeil said G7 countries must improve procurement and look at where rare earths production can be expanded. He also proposed recycling quotas, setting targets or requirements to recover and reuse a minimum share of critical raw materials.

"So the proposals are all on the table and we have no time to lose," Klingbeil said, adding that the Iran war has exposed G7 countries' dependency on fossil fuels, just as the war in Ukraine exposed Germany's dependency on Russian gas.

"We have to be very careful here not to run into the next dependency, one which, to be honest, we are already in."