All the other Chosen would have known (Demandred himself was a very high profile channeler pre-WOS, his Talents would have been widely known), making it terribly, terribly risky for Demandred to weaken himself for months at any given point in the series (and that's to make an angreal, the making of san'angreal appears to be more complicated and technical than this or Callandor wouldn't have gotten a manufacturing flaws because it was made during the WOS when industrial capabilities were almost gone). If Sammael, Rahvin got a whiff that Demandred was making himself a san'angreal - and if he had the Talent they would have been constantly on the lookout for signs, if something went wrong in Shara or Semirhage/Mesaana decided to betray him, he was doomed.

He found it in Shara, it's pretty obvious. And it's pretty obvious it's the other very powerful san'angreal Lanfear knew of but didn't know if it had survived. It did, in Shara. I suspect it we'll find out it was used as the scepter of the active figurehead ruler (who were not channelers) - the Sh'botan for seven years, then the Sh'botai etc. We know the Sharans are big believers in cycles occuring as the Will of the Pattern. The Ayyad pulled the strings from behind, actually killing the active ruler every seven years, and his mate took a new mate and ruled for seven years, then died. The hourglass thing on the scepter san'angreal would have made it appealing as a symbol, their equivalent of the Crystal Throne.

Demandred appears to really have done something to the san'angreal. Taim noticed it seemed to take something from him. That might be the result of having bound himself to it, however it's done.

We'll no doubt have many answers about the san'angreal in River of Souls.