Deep inside Gabon's rainforest, is a sacred place bathed in a permanent rainbow. The breathtaking Kangou Falls have inspired awe among the local pygmy and Bantu ethnic groups for centuries. They believe that many of their ancestors originated in these frothy pools, explains Marc Ona Essangui, an environmentalist who has been jailed for his fight to protect Gabon's rainforest.

Ona, who has been an activist since he developed polio as a child – campaigning for disabled rights and the environment – says: "My fight is the fight of all the people concerned with the survival of the planet. Our forest is home to the most extraordinary biodiversity. It is also a huge natural pharmacy. To destroy it would mean the ruin of humanity."

Yesterday, Ona, 45, won the Goldman environmental prize, the world's richest prize for grassroots environmentalists, for his fight to save Gabon's protected Ivindo national park against development. He will share the $900,000 (£607,000) prize between the winners from six continental regions.

The Ivindo park was created in 2002 to protect the Kangou Falls, as well as the forest elephants, chimpanzees and the myriad of rare plants and animals, which form the rich ecosystems of Gabon's equatorial rainforest. The 3,000-square-kilometre park is part of a conservation effort by President Omar Bongo, Africa's longest-ruling leader, who declared 11% of the country's territory as national parks in 2002.

Yet, in spite of that promise, the president has backed the Chinese-led Belinga project, a controversial $3.5bn iron ore mining development, which includes a mine, railroads, a deep-water port north of the capital, Libreville, and a dam on the Ivindo river at the Kangou Falls.

The project was negotiated between the government and the Chinese consortium CMEC, but affected communities were not consulted. Ona, who is president of the NGO Brainforest and the NGOs network Environment Gabon, and his colleagues, repeatedly called for a full environmental impact assessment of the dam, arguing it would have a catastrophic impact on the forest and its villagers.

"All the villages upstream of the dam will be flooded and people displaced," Ona told the Guardian. "People drink the water of the river and fish in it; they'll lose their livelihoods. Near the mine, the water will be polluted. "A project of this scale in a national park could also have implications for Gabon's wider conservation efforts, he adds. The Gabonese forests are part of the Congo Basin rainforest, the second largest rainforest in the world after the Amazon and a vital asset in the fight against global climate change.

In July 2007, in violation of Gabon's Environment Code, president Bongo allowed CMEC to begin constructing a road directly through the park to the waterfalls, leaving a wide red gash that opened this once impenetrable forest to poachers. "Before, it was almost impossible to reach the Kangou Falls. Now there are elephants' carcasses all over the park."

A few months later, Ona managed to obtain a leaked copy of the Belinga contract, showing that Gabon would receive only 10% of the mining profits while the Chinese corporation would receive a 25-year tax break. "The paradox is that most of Gabon's citizens remain poor, despite the billions of dollars in revenues that are generated from the extraction of its natural resources. Ona had the courage to ask who is really benefiting from Gabon's resource wealth," comments Radhika Sarin, international coordinator of the global civic society coalition Publish What You Pay.

"When we threatened to divulge the secret contract, President Bongo agreed to negotiate with us and re-evaluate the terms of the concession," Ona says. As a result, the area to be affected by the dam has been substantially reduced and the road through Ivindo Park has been rerouted through less of the protected area. The president also agreed to let two representatives from Environment Gabon monitor the project. This represents an unprecedented victory for civil society in Gabon.

Under intense public scrutiny, the government also renegotiated the contract on more favourable terms in May 2008. However, the Chinese bank behind the project is now questioning whether the new deal would be profitable enough, so the development is on hold.

Meanwhile, Ona is paying a heavy prize for his campaigning work. "Some members of the government had received substantial backhanders over this deal. They'll have to reimburse them, so they are furious and now, a sword of Damocles hangs above our heads." Brainforest's office has been broken in to, Ona has been refused permission to leave the country three times, he and his family have been evicted, and in December 2008 he and four other activists have been imprisoned for "destabilising the state through propaganda".

"I am not afraid," Ona says with a sharp laugh. "It is too late for this. We are in this fight. If they want to get me, they'll get me. We have to protect our forests. It is our country, it is our duty."

The other Goldman environmental winners

South and Central America: Wanze Eduards and Hugo Jabini, Pikin Slee Village and Paramaribo, Suriname: The pair are members of Maroon communities originally established by freed African slaves in the 1700s and successfully mobilised their communities to fight against logging on their traditional lands, ultimately leading to a landmark ruling for indigenous and tribal peoples throughout the Americas to control resource exploitation in their territories.

North America: Maria Gunnoe, Bob White, West Virginia, USA: In the heart of Appalachia, where the coal industry wields enormous power over the government and public opinion, lifelong resident Gunnoe fights against environmentally devastating mountaintop removal mining and valley fill operations.

Asia: Rizwana Hasan, Dhaka, Bangladesh: The environmental attorney led a legal battle against the environmentally damaging ship-breaking industry, resulting in increased government regulation and heightened public awareness about the dangers of ship breaking.

Europe: Olga Speranskaya, Moscow, Russia: The scientist transformed the NGO community in eastern Europe, the Caucasus and central Asia into a potent, participatory force working to identify and eliminate the Soviet legacy of toxic chemicals in the environment.

Islands & island nations: Yuyun Ismawati, Denpasar, Bali, Indonesia: As solid waste management problems mount throughout the Indonesian archipelago, Ismawati implements sustainable community-based solutions that provide employment to low-income people and empower them to improve the environment.