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Australian Defence Minister Stephen Smith says he has ordered a major review of where defence personnel are based to make sure Australia is well positioned to deal with emerging security challenges.

The Force Posture Review will consider the emerging significance of the Asia-Pacific region and the Indian Ocean rim.

It will also look at potential security threats to Australia's energy security, with a particular focus on oil and gas rigs off the coast of Western Australia and the Northern Territory.

Mr Smith says the review is due to be finished by early next year.

"[It is] to ensure that our Australian Defence Force is geographically positioned correctly to meet our modern security and strategic challenges," he said.

Investor boost

The Western Australian Chamber of Minerals and Energy says a greater military presence in northern WA could attract new investors to the state's Pilbara region.

Chamber Director Damian Callachor says the industry welcomes the review.

"The industry is supportive of initiatives to encourage economic growth in the north west of Australia," he said.

"Obviously, the resources industry is experiencing significant growth in the region and any initiatives to encourage other economic stimulus is obviously going to be welcomed."