Primary economic activities are located at the site of the natural resource being exploited. An example is iron mining at the site of the iron deposit.
Location depends upon whether the raw material or the finished product costs more to ship.
Other factors affect the location of economic activities as well, e.g., labor costs, energy costs, availability of capital, land, resources, and expertise. In the case of lumbering, the finished product is cheaper to ship than the raw materials so lumber mills are located close to forests to minimize costs and maximize profit. In the case of flour and bread, it is cheaper and easier to ship wheat than the finished product, bread. Consequently, bakeries are located close to consumers in cities to minimize costs. Tertiary economic activities are located where services are required, that is, where people live or work.