During Act 2, when you're up against the First Son of Flowing Sands, there’s a large breakable wall in the area. If the boss smashes into it or you hit it with a powerful attack (I used the Wandering Wight Spirit Skill from Act 1), the wall will shatter, revealing a Loong Scale. This scale gives you access to secret bosses in hidden locations, like the waterfall in Act 1 and the sand wall in Act 2.
You won’t get any refined iron sand from the secret boss in Act 1, but you can challenge him by using the Loong Scale at the waterfall near the Outside the Forest shrine.
After obtaining the Loong Scale, head over to Rockrest Flats, where you can now break through the sand wall. Once you defeat the Black Loong boss inside, you'll be rewarded with 2 refined iron sand and a Thunderbone weapon material.